PFC stake sale subscribed over 2 times; Govt nets Rs 1,600 cr

The government's 5 per cent stake sale today in power sector lender PFC got fully subscribed with strong demand from retail investors, marking the second successful disinvestment in the current fiscal.
The offer for sale (OFS) received bids for 15.41 crore shares or 2.34 times the 6.60 crore PFC shares on offer, as per the data on the NSE.
With the successful sale of 6.60 crore shares in Power Finance Corp (PFC) through a one-day OFS route at a floor price of Rs 254 apiece, the government would get over Rs 1,600 crore.
The sale, which began at 0915 hours and closed on 1530 hours, saw robust demand from retail buyers with bids coming in for 5.92 crore shares, as against 1.32 crore reserved for them. The portion for retail investors, who also gets a 5 per cent price discount, was over-subscribed 4.49 times.

Institutional investors bid for 9.49 crore shares, representing 1.80 times of the 5.28 crore shares on offer.
The floor price of Rs 254 a share was at a discount of 2.14 per cent over Friday's closing price of Rs 259.55.

Shares of PFC closed at Rs 254.05, down 2.12 per cent over previous close, tracking the broader benchmark Sensex which fell nearly 2 per cent on fears of Government curbs on investments through P-Notes.
PFC is the second PSU to be divested in the current fiscal under the government's disinvestment programme. In April, the government had sold 5 per cent stake in REC for Rs 1,550 crore.

At present, government holds 72.80 per cent equity in Power Finance Corporation. After sale of 6.60 crore shares representing 5 per cent stake on offer, government's holding will be reduced to 67.80 per cent.
PFC is the first disinvestment under the modified OFS rules of Sebi under which companies are allowed to disclose stake sale plans two 'banking' days ahead of the issue.
The Department of Disinvestment had approached Sebi in March saying they do not want trading days in-between the announcement and stake sale.
Earlier, the companies were required to give an advance notice of two trading days before the OFS, which the government says gave scope for speculators to beat down the share price of the disinvestment-bound PSU.

The Department has a Rs 69,500-crore target from PSU disinvestment in the current fiscal, of which Rs 41,000 crore would come from minority stake sale and Rs 28,500 crore from strategic stake sale.