Power Grid issue subscribed nearly five times

Institutional investor category subscribed nine times

The follow-on public offering (FPO) for power utility Power Grid Corporation, which closed today for institutional investors, has been subscribed nearly five times, sparking hopes of revival in the primary market.

The offering has seen total bids worth more than Rs 30,000 crore as against Rs 7,000 crore on offer.

The so-called qualified institutional buyers (QIB) category, which comprises of foreign institutional investors (FIIs), mutual funds and insurance companies, has subscribed 9,09 times. Bids put in by FIIs have totaled around Rs 16,000 crore, while that by domestic investors bids stood at nearly Rs 13,000 crore.

The Power Grid offering, first FPO to hit the market after Power Finance Corporation's in May 2011, is part of the government's Rs 40,000 crore disinvestment programme for 2013-14.

The issue will close tomorrow for remaining category of investors -- retail, high net-worth individuals (HNIs) and company employees.

So far the retail and HNI category have been subscribed 65% and 12% respectively. Investment bankers handling the issue said that the bulk of applications in these two categories will come on the last day of the issue.

Shares of Power Grid, traded in the secondary market, ended 0.42% higher at Rs 96 on the National Stock Exchange (NSE).

Shares of the company are being offered in the price band between Rs 85 and Rs 90 per share---at discount between 6.7 and 13% to the current market price.

The company is offering additional 5% discount to retail investors and its employees.

Market experts said a decent discount to the prevailing market price has led to the success of the issue. Power grid share price has remained above the secondary market price since the FPO pricing was announced last week.