Power Grid FPO opens on bourses

Shares are being offered at a price band of Rs 85-90 apiece and the issue will remain open till Dec 5

The follow-on-public offer (FPO) for 17% stake sale in Power Grid Corporation of India (PGCIL), which is expected to garner Rs 7,083 crore, opened today.

The shares are being offered at a price band of Rs 85-90 apiece and the issue would remain open till December 5 for institutional buyers and December 6 for retail investors. The FPO would remain open between 10am to 5pm.

In the first hour of trading, only 15,750 shares were bid for in the retail investor category of the over 27.44 crore reserved for them, as per data available on the NSE.

Shares of PGCIL were trading at Rs 93.70, up 0.32% in the late morning trade 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 company may garner close to Rs 5,717 crore, while the government may receive around Rs 1,758 crore.

Last month the Cabinet had cleared the FPO of PGCIL, 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 in PGCIL, while the company is issuing fresh 60.18 crore shares through the offer. Of the fresh shares, about 2.4% will be reserved for the 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 have been appointed as merchant bankers for the FPO.

This will be the second follow-on offering from PGCIL, 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 current fiscal.