Power Grid FPO price set at Rs 90/shr, govt to get Rs 1,600 cr

Price band for FPO was Rs 85-90 apiece; Cabinet approved the FPO last month

The government today fixed the issue price for the sale of Power Grid Corporation shares at Rs 90 apiece, the upper end of the band, which would fetch about Rs 7,000 crore.

The follow-on public offer (FPO) of the state-run transmission utility last week saw bids for 530 crore shares, or 6.74 times the 78.7 crore shares on offer.

Retail investors and eligible employees will get a discount of Rs 4.50 a share on the issue price, Power Grid said in a filing to the BSE.

The price band for the FPO was Rs 85-90 apiece. The Cabinet approved the FPO last month. The offer comprised 13% fresh equity by the company and 4% stake sale by the central government.

The government will get about Rs 1,600 crore from selling 18.51 crore shares, while Power Grid will raise close to Rs 5,400 crore from its offer of 60.18 crore new shares. After the issue, the government's holding in the company will come down to 57.89% from the present level of 69.42%.

The retail portion of the FPO, which closed on December 6, was subscribed 2.17 times. Qualified institutional buyers bid for 9.09 times the shares reserved for them and non-institutional buyers bid for 9.7 times the shares they were offered. Power Grid shares closed at Rs 98.90 on the BSE today, up 2.86%.

This was Power Grid's second FPO. The company and the government each sold a 10% stake in November 2010 at Rs 90 a share. The company hit the capital market with an initial public offering in October 2007.

So far in the current financial year, the government has raised over Rs 1,300 crore through the sale of minority stakes in PSUs. It has set a target of Rs 40,000 crore from disinvestment this financial year.