Power Grid FPO over-subscribed by more than 10 times
12 Nov 2010
The Power Grid Corporation follow-on public offer (FPO) was over-subscribed by more than 10 times, generating demand worth over Rs80,000 crore.
The bidding for retail investors closed today, while the one for institutional investors it got over yesterday.
The component for qualified institutional investors was over-subscribed by more than 18 times. The FPO will fetch the government over Rs7,500 crore, while its stake in the transmission major will fall by 10 per cent to a little over 75 per cent.
The issue had an offer price in band of Rs85 to Rs90 per share.
The strong response to the FPO, coming on the heels of the overwhelming response to the Coal India IPO, has come as a relief to the government. The government hopes to raise about Rs40,000 crore this fiscal through a programme of disinvesting its shares in several state-owned enterprises.
The money raised would help fund the government's ambitious social welfare projects, besides helping other public sector undertakings in their capital expenditure plans.
Analysts have recommended the Power Grid scrip for long-term gains. The scrip has been trading at around Rs95 to Rs100 on the Bombay Stock Exchange. The company came out with an IPO in 2007, which helped it garner about Rs40,000 crore.