PFC FPO likely by May 15; to raise Rs 7,000 cr

State-run lender Power Finance Corp's 20 per cent follow-on public offer (FPO) which is expected to garner close to Rs 7,000 crore is likely to open around May 15.

"If everything is done in time i.e. Selection of bankers, Cabinet approval, filing of DRHP (Draft Red Herring Prospectus) then RHP...The FPO can be expected around May 15," a Power Ministry official told PTI.

"As per current valuations PFC FPO may raise close to Rs 7,000 crore," he said. The market capitalisation of the company stands at Rs 34,203 crore.

The Power Ministry, the parent ministry of PFC had sent a proposal for a 15 per cent fresh equity and 5 per cent disinvestment of government stake in the company in November, last year.

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

PFC is engaged in funding power generation, transmission and distribution projects and plans to use the funds from 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 this 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.

Shares of PFC closed at Rs 298, down 1.06 per cent on the Bombay Stock Exchange.