PGCIL drops ahead of FPO

Power Grid Corporation of India lost 2.26% to Rs 92.90 at 10:09 IST on BSE as the price band for the company's follow on public offer was set at a discount to ruling market price.

Meanwhile, the S&P BSE Sensex was up 80.72 points or 0.39% at 20,872.65.

On BSE, 3.37 lakh shares were traded in the counter as against average daily volume of 1.85 lakh shares in the past one quarter.

The stock hit a high of Rs 94.50 and a low of Rs 91.90 so far during the day.

The stock had underperformed the market over the past one month till 29 November 2013, declining 5.38% compared with the Sensex's 0.65% fall. The scrip had also underperformed the market in past one quarter, sliding 2.06% as against Sensex's 12.99% rise.

Power Grid Corporation of India (PGCIL) has fixed the price band for the follow on public offer (FPO) at Rs 85 to Rs 90 per share. The price band has been approved by the company's board of directors at its meeting held on Friday, 29 November 2013.

PGCIL is coming up with a FPO which includes 13% of fresh issue of shares and 4% disinvestment of shares by Government of India (GoI). The issue opens tomorrow, 3 December 2013 and closes on 5 December 2013 for institutional investors and 6 December 2013 for retail category of investors & employees. A discount of Rs 4.50 per share (which is 5% of the top end of the price band) will be available to retail investors and eligible employees on the issue price on allotment.

50% of the net issue is allocated to Qualified Institutional Buyers (QIBs), 35% for Retail category and 15% for High Network Investors (HNI). Above 0.38% of the issue is reserved for employees. Retail category and employees shall be given a discount of 5% on the issue price. With the above, the GoI holding of PGCIL will come down to 57.89% from the present level of 69.42%. Presently, there is no plan for further dilution of equity in PGCIL, in the medium term, the company said.

PGCIL's net profit rose 10.1% to Rs 1239.20 crore on 29% growth in net sales to Rs 3981.64 crore in Q2 September 2013 over Q2 September 2012.

PGCIL was incorporated in 1989 for transmission of electric power across the country.

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