Government to Sell Up to 4.9% Stake in SJVN

The sale will help government achieve minimum public shareholding set out by the capital market regulator

September 21, 2023


The Indian government is set to divest up to 4.92% of its stake in the state-owned power company SJVN through an Offer for Sale (OFS). The floor price for this stake has been set at ₹69 (~$0.83)/share.

This OFS plan involves the government’s sale of a base offer comprising 2.46% of the company’s equity, with an additional 2.46% retained as an oversubscription option. The offering will commence on September 21, targeting non-retail investors, followed by retail investors on September 22.

Additionally, the base offer consists of 96.6 million shares, each with a face value of ₹10 (~$0.12), which may be further supplemented by an extra sale of 96.6 million shares through a green shoe option.

The allocation of shares will be based on a price priority system involving multiple clearing prices. No single bidder, except mutual funds and insurance companies, will be allotted more than 25% of the offered shares.

The government holds a 59.92% equity stake in SJVN, and Himachal Pradesh 26.85%.

The stake sale by the government in SJVN is intended to align with the minimum public shareholding requirement mandated by the capital market regulator.

Recently, SJVN Green Energy received the letter of intent from the Punjab State Power Corporation to develop 1,200 MW of solar power projects. The company will develop 1,000 MW of solar projects anywhere in the country, and the balance of 200 MW will be developed in Punjab. The total cost of the contract is estimated to be nearly ₹70 billion (~$853.51 million).

SJVN registered a net profit of ₹2.7 billion (~$32.5 million) during the first quarter of the financial year 2023-24, a year-over-year decrease of 55.5% from₹6.08 billion (~$73.1 million). The results were not as promising due to inadequate water availability in the Sutlej River, where two of its major hydropower projects are located.

In April, The Ministry of New and Renewable Energy designated SJVN as the implementing agency responsible for floating tenders for renewable energy projects. It will also act as the intermediary procurer of power. SJVN will work with other agencies, such as SECI, NTPC, and NHPC, to float tenders and open bids to avoid concurrent bids.