Issue to open on from December 3

An empowered group of Ministers (eGoM) headed by Finance Minister P Chidambaram decided a floor price of Rs 85-90 a share for follow on public issue (FPO) of PowerGrid Corporation of India. The same has also been approved by the Board of PowerGrid.

Five merchant bankers -- SBI Capital Markets, Kotak Securities, Citigroup, ICICI Securities and UBS – are advising PowerGrid on its FPO for 17 per cent stake sale, comprising 4 per cent stake dilution by Government and 13 per cent fresh equity by the company.

The issue will open on December 3 and close on December 5 for institutional investors and December 6 for retail category and employees.

“50 percent of the net issue is allocated to qualified institutional buyers (QIBs), 35 per cent for retail category and 15 per cent for high networth investors. In addition, 0.38 per cent of the issue is reserved for employees,” Ministry of Power said in a statement.

Retail category and employees shall be given a discount of 5 per cent on the issue price. A discount of Rs 4.50 (which is 5 per cent of the top end of the price band) will be available to retail investors and eligible employees on the issue price on allotment.

After the stake sale, the Government’s holding in PowerGrid will come down to 57.89 per cent from the current 69.42 per cent.

PowerGrid scrip closed 0.69 per cent higher lower at Rs 95.05 on Friday on the Bombay Stock Exchange. At the current valuations, the issue may mop up more than Rs 7,500 crore.

The firm launched its IPO in October 2007, and another FPO was released in 2010 at an issue price of Rs 90 a share.

Siddhartha.s@thehindu.co.in

(This article was published on November 29, 2013)
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