Power Grid follow-on share sale likely to open on 3 December

The follow-on public offer of Power grid Corporation of India (PGCIL), which at its current stock price will fetch around Rs7,400 crore for the central government, is likely to open for subscription on 3 December.

The offer is expected to remain open from 3 to 5 December, according to sources.

An empowered group of ministers (EGoM) on disinvestment, headed by finance minister P Chidambaram is likely to meet on Friday to decide on the price band for PGCIL disinvestment.

The EGoM will decide on the date and pricing for the follow-on-public offer of the state-owned company.

Government is selling 787 million shares of Power Grid, and at the current market price of Rs93.85 a share, the sale could fetch around Rs7,400 crore.

The sale comprises 185 million existing shares of PGCIL and another fresh issue of 602 million shares.

Earlier this month, the cabinet had cleared the FPO of Power Grid Corporation of India comprising 13 per cent fresh equity by the company and 4 per cent stake sale by the central government.

Of the fresh shares, about 2.4 per cent will be reserved for the employees.

The company plans to retain around Rs5,660 crore, while the government will get around Rs1,740 crore.

PGCIL has already filed the red herring prospectus with the Registrar of Companies.

Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra have been appointed as merchant bankers for the FPO.

PGCIL had earlier sold a 10 per cent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs90 a share.