SJVN slips 10% as government begins partial stake sale via OFS

The government will sell 96.67 million shares, or 2.46 per cent stake, in the company with an option to sell additional 2.46 per cent stake under offer for sale (OFS) route on Thursday and Friday.

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Shares of SJVN slipped 10 per cent to Rs 73.53 on the BSE in Thursday’s intra-day trade as the government began offloading its partial stake, using the offer for sale (OFS) mechanism, starting today.

The government will sell 96.67 million shares, or 2.46 per cent stake, in the company with an option to sell additional 2.46 per cent stake under offer for sale (OFS) route. At the floor price of Rs 69 a share, the sale of the entire 4.92 per cent stake will fetch over Rs 650 crore. The offer will open for non-retail investors today, and retail investors on Friday (Sept 22).

The SJVN sale will help the government to achieve the minimum public shareholding set out by the capital market regulator, the exchange filing said.

At 09:30 AM; the stock was quoting 8 per cent lower at Rs 75.19, as compared to 0.5 per cent decline in the S&P BSE Sensex. A combined around 37 million equity shares changed hands on the NSE and BSE.

In past three months, the stock price of state-owned power generation company has been more than doubled or zoomed 113 per cent. It hit a record high of Rs 83.69 on Wednesday, September 20.

Meanwhile, SJVN have signed a Memorandum of Understanding (MOU) with Power Finance Corporation (PFC) for financial assistance to various diversified portfolio of projects including majorly Renewable Energy projects and thermal generation project to be set up at total project cost of about Rs 1.18 trillion.

The term loan financial assistance is tentatively proposed at 70 per cent of the project cost, which may be increased for renewable energy projects as per project requirements.

Recently, SJVN also entered into several MoUs with other central public sector utilities to develop renewable energy ventures. Both PFC and SJVN aim to make a considerable impact on India’s energy security and environmental sustainability through large-scale renewable and thermal generation projects, according to the PFC statement.

Electricity generation is the principal business activity of SJVN. The company is also engaged in the business of providing consultancy.

Outlook of India’s power generation looks promising with expected increase in industrial production and Government of India’s mission to provide 24x7 electricity to all.

SJVN has prominent role to supply affordable power to provide 24x7 electricity to all. SJVN has already developed 7 power stations with installed capacity of 2091.5 MW a (including two hydro, two wind and three solar project) across the country.

SJVN is diversifying its portfolio by taking different renewable energy projects, details of which are mentioned elsewhere in this report. Subsequent to the announcement of Green Hydrogen Policy by Govt. of India, SJVN has also started taking up preliminary actions to set up Pilot Green Hydrogen as R&D Project in Himachal Pradesh.

With fourteen projects under construction, SJVN is poised to add 3765 MW during FY 2024 and 1598 MW during FY 2025. Commissioning of these projects will aid the company achieve strong financials and cash flows to emerge a stronger and bigger company, SJVN said in its FY23 annual report.