14 merchant bankers in race for PFC's Rs 7K cr FPO

As many as 14 merchant bankers, including JP Morgan and Goldman Sachs, are in the race to manage state-owned Power Finance Corporation's (PFC) proposed Rs 7,000 crore follow-on public offer (FPO).

"14 merchant bankers have evinced interest in handling the PFC FPO," sources in-the-know of the development told PTI.

JP Morgan, Goldman Sachs, DSP Merill Lynch, SBI Capital Markets, IDFC, IDBI Capital Market Services, Enam Securities, RBS Equities, ICICI Securities, Kotak Mahindra Securities, JM Financial, HSBC Securities, UBS Securities and RBS Equities have expressed interest in managing the PFC FPO.

"These firms will make their presentations and then the final decision would be taken in a day or two," sources said.

The Power Ministry had sent a proposal for divestment of 5 per cent of the government's stake and the issuance of 15 per cent fresh equity under the proposed PFC FPO to the Department of Disinvestment in November last year.

The government currently holds a 89.78 per cent stake in the firm. It had divested a 10 per cent stake through an initial public offer in 2007.

PFC provides finance for power generation, transmission and distribution projects. It plans to use the funds raised through the FPO to finance both existing loans, as well as future lending activities.

The government, which hopes to raise Rs 40,000 crore through its disinvestment programme in the 2010-11 fiscal, has already mopped up close to Rs 20,000 crore through stake sales in PSUs Satluj Jal Vidyut Nigam, Engineers India, Coal India and PowerGrid Corporation.