Power Grid sheds 6% ahead of share sale

Power Grid today slumped nearly six per cent in the early session on the Bombay Stock Exchange (BSE) after the government fixed the price band of the state-run transmission firm's follow-on public offer (FPO) at a 12 per cent discount to its Friday closing.

Yesterday, the price band of Power Grid's Rs 7,600-crore FPO was fixed by the government at Rs 85-90 per share, which is at a discount of 12 per cent from the stock's Friday closing price of Rs 102.

Reacting to the development, shares of Power Grid plunged 5.88 per cent to a month-low of Rs 96 on the BSE.

Similarly, the scrip shed 5.63 per cent to an early low of Rs 96.30 on the National Stock Exchange.

Meanwhile, the benchmark Sensex was also trading weak at 20,908.43, down 96.53 points from previous close.

Power Grid's FPO comprises over 84 crore equity shares of Rs 10 each constituting 20 per cent of existing paid-up capital. 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.