Power Grid's Rs8,600-crore follow-on share sale set for November
29 Sep 2010
State-run power distribution utility Power Grid Corp will come out with a follow-on public offer of shares worth around Rs8,600 crore (around $1.9 billion) in the first half of next month.
The equity sale, constituting 20 per cent of the existing paid-up capital of the company, will comprise 10 per cent equity dilution by the government and 10 per cent fresh equity issue by the company.
The proceeds of the issue will be used to part finance Power Grid's planned investment of about Rs55,000 crore during the XI Plan.
Power Grid, which already caters to 50 per cent of the country's power transmission requirements, is expanding capacity to cater to the evacuation requirement of central sector projects and other projects, including ultra mega power projects (UMPPs), Power Grid said in a release.
In addition to the share sale, Power Grid plans to meet its credit requirements through borrowings from domestic financial institutions and multilateral lending agencies such as the World Bank and the Asian Development Bank.
With a comfortable credit rating position, Power Grid said it is also confident of meeting its loan requirements in the coming years. PowerGrid said it has either already tied up about 80 per cent of its fund requirements or identified sources of funds so that the balance can be mobilised as per requirement.