Power Grid IPO debuts on a high

The initial public offer of India's principal power transmission company, Power Grid Corporation of India, was subscribed on the first day of the issue opening on Monday, reflecting strong investor demand for the issue.

The IPO, with 57,39,32,985 shares on offer, was subscribed by 1.08 times (bids for 61,91,30,375 shares) at the time of going to the press.

The issue constitutes approximately 13.64 per cent of the fully diluted post-issue capital of the company. Post the issue, the Government of India will continue to hold 86.36 per cent of the diluted post-issue paid-up equity capital of the company, through the Ministry of Power.

The 100% book-building offering is priced in the band of Rs 44-52 a share. The issue closes on September 13, 2007. The company aims to raise about Rs 2984 crore to fund its ongoing projects.

The net proceeds will be utilised for 15 identified transmission projects worth Rs 12,707 crore, which are in various stages of implementation.

Started in 1992-93, Power Grid Corporation owns and operates 61,875 circuit kilometres of electrical transmission lines and 106 electrical substations.

In fiscal 2007, the company transmitted approximately 298 billion units of electricity, representing about 45 per cent of the power generated in India. It manages the national grid with inter regional capacity of 14,100 mw, which shall be enhanced to more than 37,000 mw by 2012.

The book running lead managers to the issue are Kotak Mahindra Capital, Citigroup Global Markets and Enam Securities.