PFC shortlists lead managers for proposed FPO

Goldman Sachs, JM Financial, DSP Merill Lynch and ICICI Securities are likely to manage the Rs 7,000 crore follow-on public offer of state-run lending agency Power Finance Corporation.

"Goldman Sachs, JM Financial, DSP Merill Lynch and ICICI Securities have been chosen out of the 14 merchant bankers who had evinced interest in handling the PFC FPO," a source privy to the development told PTI.

Besides these investment bankers, SBI Capital Markets, IDFC, IDBI Capital Market Services, Enam Securities, RBS Equities, Kotak Mahindra Securities, JM Financial, HSBC Securities, UBS Securities and RBS Securities had expressed interest in managing PFC's FPO.

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 FPO is expected to garner around Rs 7,000 crore and is likely to open on May 15, according to Power Ministry sources.

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.