New Delhi: The follow-on-public offer (FPO) of Power Grid Corporation was subscribed 4.77 times on the third day of offer Thursday with institutional buyers lapping up the shares.
For the 78.70 crore shares offered for sale, the total number of bids received was 375.73 crore at close today. The number of bids at cut off price was 16.88 crore, as per data available on bourses.
The shares are being offered at a price band of Rs 85-90 apiece. The issue will remain open tomorrow but only for retail investors.
Power Grid shares closed at Rs 96.15, up 0.63 percent from its previous close on BSE.
The sale of 78.70 crore shares, or 17 percent stake, could fetch around Rs 7,083 crore at the upper end of the price band.
The Cabinet last month cleared the FPO which comprises 13 percent fresh equity by the company and 4 percent stake sale by the central government.
The government is selling 18.51 crore shares, while the company is issuing fresh 60.18 crore shares through the offer. About 2.4 per cent of fresh shares are reserved for employees.
With fresh share issue, the company may garner close to Rs 5,416 crore at upper price band, while the government may receive around Rs 1,666 crore by diluting its stake.
Post-issue, the government holding in the company will come down to 57.89 percent from the present level of 69.42 percent.
As much as 50 percent of the net issue is allocated to qualified institutional buyers (QIBs), 35 percent for retail category and 15 percent for high network investors (HNI). Above 0.38 percent of the issue is reserved for employees.
Retail investors and employees shall be given a discount of 5 percent on the issue price.
Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra are merchant bankers for the FPO.
This is the second follow-on offering from Power Grid, which sold a 10 percent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs 90 a share.
The company hit the capital market with an initial public offering in October 2007.
So far in the current fiscal, the government has raised over Rs 1,300 crore through minority stake sale in PSUs.
It has set a target of Rs 40,000 crore from disinvestment in the current fiscal.
Power Grid Corp plans to utilise proceeds from follow-on public offer towards transmission projects and general corporate purposes.
