Comments
The Government has approved the follow-on public (FPO) offer of the state-run lending agency Power Finance Corporation worth about Rs 5,732 crore.
The exact amount to be raised through the offer can be ascertained only after the Empowered Group of Ministers (EGoM) decides the offer price.
“The Cabinet Committee on Economic Affairs (CCEA) today approved the follow-on public offer of PFC,” an official statement said here.
The company will also infuse 15 per cent fresh equity by issuing 17,21,65,005 shares of Rs 10 each. “The fresh equity would be 15 per cent of the pre-issue existing paid up capital,” it said.
Meanwhile, sources said the FPO is likely to hit the market in the first quarter of next financial year.
The offer would comprise 5 per cent disinvestment of the government’s share in PFC by putting 5,73,88,335 crore shares of Rs 10 each on sale.
The government currently holds 89.78 per cent stake in the public sector company. The market capitalisation of PFC currently stands at Rs 28,854 crore. After the proposed FPO, the government’s stake may go down to about 85 per cent.
The statement said that the reservation of equity shares for PFC employees is subject to the limit prescribed for retail investors by SEBI, which will not exceed 0.12 per cent of the issue size. A discount of 5 per cent of the offer price will be given to retail individual investors and eligible employees.
The public offer would help PFC to meet the eligibility requirement of maintaining a CRAR (Capital to Risk Assets Ratio) of 15 per cent for industrial finance company status. The FPO will also enhance the equity base of the company to enable it to meet the growing future investment needs of the power sector.
PFC is a non-banking financial institution that provides loans for various power projects in generation, transmission and distribution sectors as well as for renovation & modernisation (R&M) of existing power projects.
Meanwhile, the shares of the company were trading at Rs 249.7 a piece, down 2.44 per cent from the previous close in the afternoon trade on the Bombay Stock Exchange.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.