PFC FPO likely in April-May

The follow-on public offer (FPO) of state-run Power Finance Corporation is likely early in the next financial year, “April or May,” said Union power secterary, P Uma Shankar.

Last November, the ministry of power had sent a proposal for issue of 15 per cent fresh equity and five per cent disinvestment of government stake in the company. The FPO is expected to garner about Rs 7,000 crore.

The government currently holds 89.78 per cent stake, having divested 10 per cent through an Initial Public Offer in 2007.

It is learnt the company has shortlisted Goldman Sachs, JM Financial, DSP Merrill Lynch and ICICI Securities as lead managers for the proposed FPO.

PFC provides finance for power generation, transmission and distribution projects. It plans to use funds raised through the FPO to finance existing loans and new lending.

It is also exploring possibilities of acquiring a stake in a bank or to acquire a bank. The board of directors has approved the appointment of a consultant to check this idea.

For the third quarter ended December last year, the company had recorded a 17 per cent increase in net profit to Rs 658.8 crore, against Rs 563.6 crore in the same quarter last year. Total income rose to Rs 2,581 crore for the third quarter ended December 31, compared to Rs 2,030 crore in the corresponding period last year.