Power Grid FPO evokes good response
09 Nov 2010
The follow-on public offering (FPO) of Power Grid Corporation of India Ltd, the country's largest power transmission company, was over-subscribed on the opening day today.
The company, that carries half of all the power generated in India, hopes to raise nearly Rs.8,500 crore through the sale of shares.
The FPO includes a 10-per cent disinvestment by the Indian government and a fresh equity infusion, that will see the government's stake reduced to 69.4 per cent following, following the public issue.
Power Grid hopes to invest more than $25 billion over the next five years to meet the growing demands in the transmission sector in the country.
The state-owned power distributor went in for its maiden public offer in 2007, raising Rs.2,900 crore through the issue, which was then over-subscribed by more than 64 times. The issue saw a reduction of the Indian government's stake to 86.4 per cent following the IPO.
The scrip has, however, not been faring well on the bourses. It reached a 52-week high of Rs.121 and is currently trading at around Rs.98. The government has set a price band of between Rs.85 and Rs.90 for the FPO, much lower than the market price.
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