Power Finance Corp hopes to raise Rs4,700 crore from follow-on offer
10 May 2011
Power Finance Corp (PFC), the state-run lender for power projects, has launched its follow-on public offer today, through which it expects to raise up to Rs4,700 crore.
The price band has been fixed at Rs193-203 per share, which will fetch the government Rs4,400 crore at the lower end and Rs4,700 crore at the upper end. The offer closes on 13 May.
The PFC, a 'navratna' or profit-making financial institution, is offering a 5 per cent discount in the issue price to retail bidders and eligible employees.
The offering comprises a fresh issue of 172,165,005 equity shares and offloading of 57,388,335 equity shares by the government, which holds about 89 per cent stake in PFC. The government is thus divesting 5 per cent of its stake in the company. It earlier divested 10 per cent stake through an initial public offering in March 2007.
PFC said it intends to utilise the 15 per cent fresh equity generated through the FPO in augmenting its capital base to ensure compliance with requisite capital adequacy norms and for future capital requirements.
Finance minister Pranab Mukherjee had announced plans to raise Rs 40,000 crore through divestment programme in fiscal year 2011-12. The PFC FPO is the first divestment by the government in the current fiscal year.
''The government has also lined up public offers of SAIL, ONGC and Hindustan Copper in the current fiscal,'' disinvestment secretary Sumit Bose said in New Delhi on Monday.
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