PFC's FPO on May 10 first disinvestment in 2011-12

The follow on public offer of state-run Power Finance Corporation (PFC) will open on May 10, making it the first disinvestment by the government this financial year.

The disinvestment in PFC, which provides financing to the power sector, is expected to raise about Rs 6,000 crore.

In a public announcement today, PFC said the offer would close on May 13. The FPO comprises fresh issue of 17.21 crore equities and the government offloading about 5.74 crore shares in the company.

For the qualified institutional buyers (QIBs), the offer would close on May 12. The government holds about 89 per cent stake in PFC, after divesting 10 per cent through an initial public offering in March 2007. For this year, the government has set a target of mopping up Rs 40,000 crore through disinvestment in public sector entities.

In 2010-11, amount raised through disinvestments stood at more than Rs 22,700 crore. Last year, PFC was given infrastructure finance company status — a move that enabled the entity to mop up funds through issue of tax — free infrastructure bonds.

In April, the board of directors of PFC had approved the red herring prospectus (RHP) for the proposed FPO.