In a significant development, the shares of hydroelectric power generator SJVN Ltd took a substantial hit during early trading on Thursday, plummeting by 10%. This decline comes hot on the heels of the Indian government’s revelation of its intent to divest up to 4.92% of its stake in the company through an Offer for Sale (OFS). On the BSE, the company’s stocks experienced a drastic drop, falling by 10.05% to Rs 73.53 from the previous day’s close of Rs 81.75.
This steep fall is especially notable given that it transpired shortly after SJVN shares reached a record high of Rs 83.69 in the previous trading session. During the course of Thursday’s session, SJVN’s market capitalization dwindled to Rs 29,465 crore. A total of 27 lakh shares changed hands, resulting in a turnover of Rs 20.18 crore on the BSE. Over the past year, the company’s shares have exhibited considerable volatility, indicated by a beta value of 1.1.
The government’s OFS is poised to commence today, offering a total of 9,66,72,962 equity shares during a two-day sale period. The base price for this offer has been established at Rs 69 per share, representing a discount of 15.59% in relation to SJVN’s closing price on the preceding Wednesday. Non-retail investors can participate starting today, while retail investors will have access from Friday onwards.
In the event of oversubscription, the company has articulated its intention to procure an additional 9,66,72,961 shares, equating to 4.92% of the firm’s total issued and paid-up equity share capital.
From a technical perspective, SJVN’s stock is currently in the overbought zone, with a relative strength index (RSI) of 73.1. Furthermore, the shares are trading above their 20-day, 50-day, 100-day, and 200-day moving averages but remain below the 5-day moving average.
During the preceding session, SJVN shares reached an all-time high subsequent to the company entering into a memorandum of understanding with Power Finance Corporation. This memorandum pertained to financial assistance extended to a diverse array of projects valued at approximately Rs 1,18,826 crore. These projects predominantly encompass renewable energy and thermal generation. The envisaged term loan financial assistance is expected to cover 70% of the project cost, with potential adjustments for renewable energy initiatives.
SJVN Limited operates within the electricity generation sector, with its tariff structure geared toward power generation. The company provides three primary product and service categories: electricity generation (hydro, wind, and solar), consultancy, and transmission. Its business portfolio encompasses thermal power, hydro power, wind power, solar power, power transmission, consultancy services, and power trading.
