SJVN initiates offer for sale

SJVN , a government-owned power producer, has launched an offer for sale (OFS) to divest up to 4.9 per cent of its outstanding shares, with the aim of raising approximately Rs 1,333 crore. This OFS is being conducted on behalf of the Government of India, and consequently, the company will not directly benefit from the proceeds.

About the offer for sale

The floor price for this offering has been set at Rs 69 per share, which is 16 per cent less compared to its closing price as of September 20, 2023. Consequently, the share price has experienced a decline of approximately 12 per cent thus far. The OFS will take place over a two-day period from September 21 to 22, where retail investors will be allowed to participate on the second day.

About SJVN

Originally established as a joint venture between the Government of India and the Government of Himachal Pradesh, SJVN, a Mini Ratna, has now evolved into one of the leading power producers, boasting a total capacity of 2,091 MW. Of this capacity, 91 per cent is dedicated to hydroelectric power, with the remainder allocated to renewable energy sources. The company has set ambitious goals, aiming to achieve a capacity of 12,000 MW by 2026 and 25,000 MW by 2030. To accomplish this, SJVN currently has projects under construction with a combined capacity of 4,438 MW, and an additional 49,000 MW in other planned projects.

Furthermore, SJVN plays a pivotal role in supplying electricity to the state of Himachal Pradesh and offers a dividend yield of 2.2 per cent (as of September 21, 2023). Over the past five years, the company has consistently distributed dividends, amounting to a cumulative payout of Rs 10 per share, with a median payout ratio of 55 per cent.