Power Grid share sale subscribed 6.73 times
New Delhi: The share sale offer of Power Grid Corporation was subscribed 6.73 times on the final day of offer Friday as institutional and retail buyers queued up to bid for shares in the state-run transmission utility.
The follow-on-public offer (FPO) which remained open for 4 days, saw bids coming in for nearly 530 crore shares, against 78.70 crore on offer, or 6.73 times.
Retail investors, who would be alloted shares at a discount of Rs 4.50 apiece over the issue price, came in on the final day of the offer. The portion of shares reserved for retail buyers were fully subscribed, sources said.
The shares are being offered at a price band of Rs 85-90 apiece. The number of bids at cut off price was over 56.52 crore, as per data available on bourses.
The sale of 78.70 crore shares, or 17 percent stake, could fetch around Rs 7,083 crore at the upper end of the price band.
As per the stock exchange data, the qualified institutional buyers bid for 9.09 times the shares reserved for them. The non-institutional buyers, which include corporates, subscribed to only 12 percent of shares.
Power Grid shares closed at Rs 98.90, up 2.86 percent from previous close on BSE.
The Cabinet last month cleared the FPO which comprises 13 percent fresh equity by the company and 4 percent stake sale by the central government.
The government is selling 18.51 crore shares, while the company is issuing fresh 60.18 crore shares through the offer. About 2.4 percent of fresh shares are reserved for employees.
With fresh share issue, the company may garner close to Rs 5,416 crore at upper price band, while the government may receive around Rs 1,666 crore by diluting its stake.
Post-issue, the government holding in the company will come down to 57.89 percent from the present level of 69.42 percent.
As much as 50 percent of the net issue is allocated to qualified institutional buyers (QIBs), 35 percent for retail category and 15 percent for high network investors (HNI). Above 0.38 percent of the issue is reserved for employees.
Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra are merchant bankers for the FPO.
This is the second follow-on offering from Power Grid, which sold a 10 percent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs 90 a share.
The company hit the capital market with an initial public offering in October 2007.
So far in the current fiscal, the government has raised over Rs 1,300 crore through minority stake sale in PSUs. It has set a target of Rs 40,000 crore from disinvestment in the current fiscal.