NHPC OFS: Centre raises stake sale to 6% after 3.47x demand

Strong first-day response triggers greenshoe decision

The Centre has decided to increase its Offer for Sale (OFS) in NHPC Ltd to 6% of the company’s paid-up equity after the issue saw strong demand on the first day. The OFS was subscribed 3.47 times on June 2 for non-retail investors, according to updates cited in reports. Based on this response, the government chose to exercise the full greenshoe option. That decision raises the stake sale size from the base offer of 3% to the full 6% available under the structure announced earlier. The move reflects how the OFS mechanism allows the seller to increase supply when bids exceed the shares on offer.

What was announced in the NHPC OFS

The government had announced the OFS with a base offer of 3% of its equity in NHPC and an additional 3% greenshoe option in case of over-subscription. The floor price for the offer was fixed at ₹71 per share. This floor price was reported as a discount of about 8% to NHPC’s previous closing price of ₹77.19. At the floor price, the stake sale was expected to fetch up to about ₹4,650 crore. The structure is designed to complete the sale through exchange-based bidding within the specified OFS window.

Subscription: 3.47x on day one for non-retail

On June 2, the opening day of bidding for non-retail investors, bids exceeded the shares on offer by 3.47 times. Multiple reports attributed this data point to the Department of Investment and Public Asset Management (DIPAM) and its secretary, Arunish Chawla. The oversubscription on day one was the trigger for the government to scale up the sale using the greenshoe mechanism. The decision to expand the offer size means the government can sell more shares at discovered prices, subject to OFS rules and demand.

DIPAM’s update and allocation method

DIPAM Secretary Arunish Chawla posted on X that the issue received an enthusiastic response and that allocation would be on a “price priority basis.” He also stated that the government has decided to exercise the entire greenshoe option following the robust demand. In OFS transactions, price priority allocation generally means higher-priced bids are considered first during allotment, within the framework specified for the offer. The communication also clarified the bidding schedule for different investor categories.

Stake sale expands from 3% to 6%

With the greenshoe exercised in full, the Centre will divest an additional 3% stake, taking the total offer size to 6% from the base offer of 3%. This means the sale now includes both the base issue and the shares offered through the oversubscription option. The 6% figure is stated as a share of NHPC’s total paid-up equity share capital as on March 31, 2026. The increase is directly linked to the level of investor interest observed on the first day.

Key share numbers disclosed in the offer

According to the details cited from a stock exchange filing, the government proposed to sell 30,13,51,044 equity shares as the base offer size, representing 3% of paid-up equity. The offer also included an option to additionally sell up to 30,13,51,044 equity shares under the oversubscription (greenshoe) option. If fully exercised, the combined base plus greenshoe represents 6% of the paid-up equity as on March 31, 2026. Collectively, that equals 60,27,02,088 equity shares. The filing also noted that the equity shares have a face value of ₹10 each.

Timeline: non-retail on June 2, retail and employees on June 3

The OFS opened for non-retail investors on June 2, 2026. Retail investors and employees were scheduled to bid on June 3, 2026. This two-day structure is commonly used in OFS processes, where the first day is reserved for non-retail participation and the next day allows retail and eligible employee bidding. DIPAM’s post also referenced this sequence while sharing the oversubscription and allocation approach.

What the discount and floor price signal

The floor price was set at ₹71 per share, which was reported to be about 8% lower than the previous closing price of ₹77.19. A floor price discount can support participation by providing a price cushion relative to the last traded price. In this case, the discount was paired with strong non-retail demand on day one, as indicated by the 3.47x subscription figure. The government’s decision to scale the offer up to the full 6% suggests the initial response was strong enough to absorb additional supply.

Snapshot of the NHPC OFS (facts from disclosures)

Why the greenshoe exercise matters for investors

The greenshoe option changes the effective size of the stake sale and can influence how much stock is available for allotment, particularly when demand is high. For investors, the key immediate implications are the final offer size, the floor price, and the allocation method stated by DIPAM. The increase to 6% means the government can place a larger quantity of shares through the OFS route than originally offered under the base size. Retail and employee participation, scheduled for June 3, becomes more relevant as the total shares on offer expand following the first-day response.

Conclusion

NHPC’s OFS drew bids worth 3.47 times the shares offered on the first day for non-retail investors, leading the Centre to exercise the entire greenshoe option. As a result, the stake sale size has been raised from 3% to 6% of paid-up equity, with the floor price set at ₹71 per share. The next key step in the process is the retail and employee bidding window on June 3, 2026, along with allotment based on price priority as stated by DIPAM.