PFC FPO subscribed 4.32 times

The follow-on public offering (FPO) of state-run Power Finance Corporation (PFC) was subscribed 4.32 times shares offered till 6 pm on Friday, the last day of bidding for the issue.

Final subscription numbers for categories reserved for retail and non-institutional investors were not available till 7 pm on the websites of National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

The portion reserved for qualified institutional buyers (QIBs) was subscribed 6.92 times on Thursday, the last day of bidding for that category.

The price band for the issue was fixed at Rs 193-203 per share. Retail investors and PFC employees will get a five per cent discount on the issue price. Shares of PFC closed almost flat at Rs 215.85 on the Bombay Stock Exchange (BSE) on Friday.

“PFC has witnessed strong growth in loan assets over the past five years driven by significant investments in the power sector. Company’s net interest margin has been robust and return on assets/return on equity have been impressive,” brokerage IIFL (India Infoline) told its clients in an FPO note.

“We recommend investors to subscribe in the issue, as implied valuation is attractive at 1.4-1.5 times price to book value as in December 2010,” it added.

The size of PFC issue was 22.95 million shares, comprising a fresh issue of 17.21 million shares and an offer for sale by the government of 5.74 million shares.

With PFC issue, the Indian government has started its Rs 40,000 crore disinvestment programme for the current financial year. It next plans to bring out FPO of SAIL in June, followed by ONGC in July.