PowerGird FPO anytime next month; govt may raise Rs 1,900 cr

Company plans to sell 17% equity, out of which the govt share will be around 4%

State-run transmission utility Power Grid Corporation today said it expects to launch the follow on public offer (FPO) anytime next month.

According to the company, the government could get about Rs 1,900 crore from the process, while the company will garner about Rs 6,000 crore from the sale of fresh equities.

The company plans to sell 17% equity, through the FPO route, out of which the government share will be around 4% and the rest 13% will be fresh issue of equity shares to the extent of 13% of the pre-issue equity capital worth around Rs 6,000 crore, the company said.

"We have completed all the necessary procedures from our side and can launch it as soon as possible. But we are awaiting the approval from the Cabinet Committee on Economic Affairs (CCEA)," Chairman and Managing Director R N Nayak told reporters here.

Another official said: "We are expecting the approval soon. We can even float the FPO in November."

The Navratna company has proposed to issue fresh 60.18 crore shares, or 13% of the current equity base, through the FPO, while the government proposes to dilute its 18.51 crore shares or 4% stake out of its current 69.42% holding, as part of its Rs 44,000 crore divestment programme, out of which it could so far raise a little over Rs 1,100 crore.

After the FPO, the government stake in the company will reduce to 57.89%, Nayak said.

ICICI Securities, SBI Capital, Citi, UBS and Kotak Securities are managing the sale.

This will be the second follow-on offer from PowerGrid, which sold a 10% 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 markets with its initial public offer in October 2007.

Meanwhile, the company posted a 10% increase in its net profit in the September quarter at Rs 1,239 crore against Rs 1,126 crore a year ago.

Total income stood at Rs 4,104 crore, registering 27% growth, compared to Rs 3,243 crore a year ago.

Currently, PowerGrid is operating more than 1,02,100 circuit km of transmission lines along with 172 sub-stations and transformation capacity of around 1,72,370 MVA with an inter-regional power transmission capacity of about 31,850 mw.