Govt fixes Power Grid FPO price band at Rs 85-90

The government today fixed price band at Rs 85-90 per share for about Rs 7,600 crore follow-on public offer (FPO) of state-run transmission company Power Grid Corporation of India.

"The price band for PowerGrid has been fixed between Rs 85-90," Power Minister Sushilkumar Shinde said after meeting of Group of Ministers here.

The FPO comprises over 84 crore (84,17,68,246) equity shares of Rs 10 each constituting 20 per cent of existing paid-up capital. At the upper end of the price band, the issue will fetch up to Rs 7,600 crore.

The FPO of the company hits the market on November 9. The bid closes on November 11 for institutional investors and on November 12 for retail and non-institutional bidders.

The company plans to raise 10 per cent fresh equity, while the government is likely to offload 10 per cent of its 86.36 per cent stake in PowerGrid.

Besides disinvestment of the government stake, the fresh capital raising would be used for part funding investment requirement of about Rs 58,000 crore of the PSU.

The PSU has already tied up 86 per cent of the funds required for its capex plan and the remaining amount will be raised through the FPO and bonds issues.

The company aims to augment transmission capacity to 23,400 Mw in the current fiscal from 19,800 Mw at present.

On the transmission side, the company had been awarded Rs 7,000 crore worth of projects. It hopes to bag projects worth Rs 14,000 crore in FY11.

The company had hit the capital market in October, 2007, with its maiden public offer. The government had divested 5 per cent of its stake in the company at that time.