Power Grid FPO issue fully subscribed

The follow-on-public offer (FPO) of Power Grid Corporation was fully subscribed on the second day today.

Of the 78.70 crore shares offered for sale, the total number of bids received was 78.61 crore till 1600 hrs. The number of bids at cut off price was 2.5 crore. According to data on bourses, the issue is subscribed fully.

The shares are being offered at a price band of Rs 85-90 apiece. The issue is open till December 5 for institutional buyers and for retail investors it will close a day later on December 6.

Power Grid shares closed at Rs 95.55, up 1.92% from its previous close on the BSE.

The sale of 78.70 crore shares, or 17% stake, could fetch around Rs 7,083 crore at the upper end of the price band.

The Cabinet last month cleared the FPO which will comprise 13% fresh equity by the company and 4% stake sale by the central government.

The government is selling 18.51 crore shares, while the company is issuing fresh 60.18 crore shares through the offer. About 2.4% of fresh shares is reserved for employees.

As much as 50% of the net issue is allocated to qualified institutional buyers (QIBs), 35% for retail category and 15% for high network investors (HNI). Above 0.38% of the issue is reserved for employees.

Retail category and employees shall be given a discount of 5% on the issue price.

The government holding in the company will come down to 57.89% from the present level of 69.42%.

Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra are merchant bankers for the FPO.

This is the second follow-on offering from Power Grid, which sold a 10% 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 market with initial public offering in October 2007.

So far in the current fiscal, the government has raised over Rs 1,300 crore through minority stake sale in PSUs.

It has set a target of Rs 40,000 crore from disinvestment in the current fiscal.

Power Grid Corp plans to utilise proceeds worth over Rs 5,700 crore from follow-on public offer towards transmission projects and general corporate purposes.