PFC FPO oversubscribed 4.32 times on final day

The follow-on public offer (FPO) of state-run Power Finance Corporation (PFC) was oversubscribed by 4.32 times on the final day of the issue today.

The Navratna financial institution, which plans to raise around Rs 4,700 crore through the FPO, received bids for 99.12 crore shares as against 22.96 crore shares on offer, according to data available with the National Stock Exchange.

The major support was seen from qualified institutional buyers with their reserved portion getting subscribed nearly seven times till yesterday.

It is the first divestment by the government in the current financial year. Finance Minister Pranab Mukherjee had announced plans to raise Rs 40,000 crore through divestment programme in FY12.

The price band for the offer has been fixed at Rs 193-203 per share. The offer began on May 10.

The offer comprises issue of about 172,165,005 fresh equity and sale of around 57,388,335 shares by the government, which has 89% stake in the company.

PFC is also offering a 5 per cent discount for retail investors and eligible employees.

The company plans to use the proceeds to mainly boost its capital base.

The power sector, a key infrastructure area, is perceived as the main driver of India's higher economic growth. The 11th Plan (2007-12) targeted 78,700 MW installed power generation capacity addition, while the 12th Plan (2012-17) aims at adding 1,00,000 MW.