PowerGrid's Rs 7,083 cr FPO opens Tuesday
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PowerGrid's Rs 7,083 cr FPO opens Tuesday

Last Updated: Monday, December 02, 2013, 20:16
 
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PowerGrid's Rs 7,083 cr FPO opens Tuesday
Mumbai: Power Grid Corporation of India Ltd (PGCIL), which expects to raise Rs 7,083 crore through the follow-on public offer - to hit the market Tuesday - plans to utilise the proceeds partly to fund its 27 transmission line projects worth over Rs 48,354 crore.

The FPO for 17 percent stake sale will open tomorrow and close on December 5 for institutional investors. For retail category investors and employees, it will close on December 6.

"The proceeds of the issue will be used to fund our 27 projects, which we have identified to strengthen the transmission network," Chairman and Managing Director of the state-owned firm R N Nayak told reporters Monday.

The funds will also be used for corporate purposes, he said. The price band for the issue, where PGCIL will offer 78.70 crore shares, has been fixed at Rs 85-90 a share.

Of the 17 percent equity stake sale, the government's share would be to the extent of 4 percent, and issue of fresh equity shares is to the extent of 13 percent of the pre-issue equity capital.

The company may garner close to Rs 5,717 crore, while the government will get around Rs 1,758 crore.

The government will sell its 18.51 crore shares, while the company will issue 60.18 crore fresh shares through the offer. Of the fresh shares, about 2.4 percent will be reserved for the employees.

Nearly 50 percent of the net issue is allocated to qualified institutional buyers, 35 percent for retail category and 15 percent for high network investors. Above 0.38 percent of the issue is reserved for employees.

Retail category investors and employees will be given a discount of 5 percent on the issue price. The government holding in the company will come down to 57.89 percent from the present level of 69.42 percent.

Shares of PGCIL closed at Rs 93.40, down 1.74 percent on the BSE.

Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra have been appointed as merchant bankers for the sale.

This will be the second follow-on offering from PGCIL, which sold 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 markets with an initial public offering in October 2007.

So far in the current fiscal, the government has raised under Rs 1,300 crore through minority stake sale in PSUs, out of the targeted Rs 40,000 crore.



PTI

First Published: Monday, December 02, 2013, 20:16


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