Power Min to seek Cabinet approval for PFC FPO

The Power Ministry would send a note to the Cabinet next week to receive approval for raising about Rs 7,000 crore through a follow-on public offer of the state-run lending agency Power Finance Corporation, which is likely to come during the first quarter of the next financial year.

"We would send the Cabinet note on the PFC FPO next week...Lets see...The offer may come in April or so," a Power Ministry official said, adding that the amount to be raised through the offer cannot be ascertained right now and an Empowered Group of Ministers (EGOM) will decide that.

The offer comprises 5% disinvestment of the government's share in PFC and raising of 15% fresh equity by the company.

The market capitalisation of PFC currently stands at Rs 30,071 crore.

The government currently holds 89.78% stake in the public sector company. It had divested 10% stake through an initial public offering (IPO) in 2007. After the proposed disinvestment, it's stake might go down to about 85%.

PFC is a non-banking financial institution that provides loans for various power projects in generation, transmission, distribution sector as well as for renovation & modernisation (R&M) of existing power projects.

The government has set a target of raising Rs 40,000 crore from disinvestment this fiscal, against Rs 25,000 crore last fiscal.