SJVN extends losses as government set to exercise greenshoe option

Shares of SJVN Limited traded over a percent lower to Rs 70 in early trade on September 22, extending losses for a second day in a row, after the government announced its decision to exercise the greenshoe option in the hydroelectric power generation company.

A greenshoe is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than initially planned by the issuer if the demand for a security issue proves higher than expected.

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The Government of India will exercise its greenshoe option of a 2.46 percent stake or 9.66 crore shares for the offer-for-sale on September 22, the company said in an exchange filing on September 21. Hence, the total offer size will be up to 19.3 crore equity shares, representing 4.92 percent of the total paid-up equity.

The option comes after the government announced an offer-for-sale to sell 9.67 crore equity shares, or 2.46 percent equity stake in SJVN, with an option to sell another 2.46 percent by retaining oversubscription.

In the last six months, SJVN shares have given a return of 130 percent.

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Last week, the company’s green energy arm signed a power purchase agreement with the Bhakra Beas Management Board (BBMB) to develop an 18 MW solar power project.

SJVN Green Energy will develop the project on the land parcels of BBMB in Himachal Pradesh and Punjab. It is scheduled to be commissioned by August 2024.

The project has been secured through open competitive bidding at a tariff of Rs 2.63 in the e-reverse auction organized by the Punjab Energy Development Agency, the company said.

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