In a move to fuel its expansion and meet the Union government’s monetisation target, state-run hydropower company, NHPC is set to raise about ₹2,300 crore this fiscal year, exceeding its initial target of ₹2,000 crore.
What Happened: NHPC plans to raise the funds by securitising the return on equity of its Dulhasti Power Station in Jammu and Kashmir for eight years, while retaining ownership of the project, as per a Mint report. The power sector accounts for 7% of the total value of the assets under the Union government’s national monetisation pipeline, making this move significant for NHPC’s expansion plans.
The company has invited bids from banks and NBFCs (non-banking financial companies) for its securitisation plan. The financial institution offering the lowest discounting rate or the highest amount for securitisation will be selected, and the Dulhasti Power Station project will be pledged with it.
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A spokesperson for NHPC confirmed that the company will retain “full control and ownership of the project” and that the securitisation will be completed in October or November, the report added. The funds raised will be used for capital expenditure, effectively serving as a loan for the company.
This is not the first time NHPC has implemented such a securitisation. In FY24, it raised ₹2,046.94 crore by monetising the return on equity of its Kishanganga Power Station for eight years.
NHPC’s decision to raise funds through securitisation comes on the heels of several significant developments. In August 2024, the Government of India bestowed the esteemed Navratna status on NHPC, a Central Public Sector Enterprise.
This was followed by NHPC renewing a memorandum of understanding with the Department of Water Resources to set up several pumped storage projects in Maharashtra.
Price Action: NHPC’s share price was down 0.032% to trade at ₹93.43 as the markets opened on Wednesday.
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