Power Grid, which will soon hit the market with a follow-on public offer, will seek shareholders’ approval to hike shareholding limit for FIIs in the company to 30 per cent from existing 24 per cent.
Power Grid Corporation of India Ltd has said that increasing the limit would provide more headroom for investments by Foreign Institutional Investors (FIIs) in the company.
In the postal ballot notice sent to shareholders, the utility has said that present holding of FIIs in the company is about 16 per cent of paid up capital. FIIs holding have been on the rise since the company’s FPO in 2010.
To “make more headroom for FIIs”, it is proposed to increase their shareholding limit in the company to 30 per cent from 24 per cent of the paid up capital, according to Power Grid.
Further, the firm has said that increasing the limit would also enable FIIs to acquire shares within the proposed limit of 30 per cent of paid-up capital under the portfolio investment scheme of the Reserve Bank of India.
Besides, the company has sought approval from shareholders to increase borrowing limits to Rs 1,30,000 crore from current cap of Rs 1,00,000 crore.
Both proposals were approved by Power Grid’s Board of directors during their meeting held on October 23.
Meanwhile, the central transmission utility, which is expected to come out next month with its FPO, would see issue of 13 per cent fresh equity besides government selling four per cent stake in the offering.
The company would issue fresh 60.18 crore shares while the government would sell 18.51 crore scrips through the FPO, which was cleared by the Cabinet earlier this month.
Power Grid came out with its initial public offering in October 2007.