Mighty River Power will list on Friday, with the Government retaining at least 51% of the company.
Milford Assets Management senior analyst William Curtayne said from Auckland there was no doubt in his mind the Labour-Green electricity proposal to nationalise the industry had affected the the sales process.
''It is disappointing for taxpayers, as they lose out on the money being raised from the sale of the shares.''
Before the policy announcement, the shares were likely to have been listed at the top of the $2.35 to $2.80 range. Mr Curtayne said the price was now likely to be at the mid range of $2.45 to $2.50 a share. If they were allocated at $2.35, that would show that demand was not as strong as expected.
''Hopefully, we will get an indication on the night about the demand price and can prepare accordingly,'' he said.
Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall would have been working through the allocations and the pricing indications from institutions before making their announcement today, Mr Curtayne said.
Retail investors, or ''mum and dads'', would be the first to receive their allocations, fulfilling the commitment made by Prime Minister John Key.
New Zealand and overseas institutions would then receive their allocations.
Having international institutions involved would help set the price, he said.
Whatever the price, the listing on Friday afternoon would be ''massive'' and a lot of volume was expected as institutions bought and sold to reach their target weighting.
Mighty River Power would not go into the NZX50 until later in the year but the institutions would want to reach their indicative holdings before then, Mr Curtayne said.
''We are still hoping the bankers will price it for a successful float, to help get Meridian Energy off later in the year,'' Mr Curtayne said.
The Government plans to partially sell off Meridian and Genesis, as part of its mixed ownership model policy. The Government's stake in Air New Zealand is also likely to be sold down. Solid Energy has been taken off the list of partial asset sales.
