Government clears 20 per cent follow-on equity sale in Power Grid
22 Jul 2010
The government has approved the follow-on public issue of 20 per cent paid-up equity capital of Power Grid Corporation of India (PGCIL), taking the total divestment in the state-run power utility to 30 per cent.
The cabinet committee on economic affairs today approved the follow-on public offer of 84,17,68,246 equity shares of Rs10 face value each of Power Grid Corporation of India Limited.
This comprises fresh issue of 42,08,84,123 equity shares (10 per cent of existing paid-up capital) and offer for sale (divestment) of 42,08,84,123 equity shares (10 per cent of existing paid-up capital).
Power Grid will use the proceeds of the equity sale for investment programmes.
The fresh issue of FPO would result in the PGCIL meeting with the CERC allowed norms of 30 per cent equity contributions during the XI Plan period.
From the current financial year (2010-11), Power Grid will be required to approach the capital market for raising funds through issue of fresh equity for funding its investment programme.