Power Grid’s Rs7,000-cr share sale fully subscribed

The follow-on-public offer (FPO) of Power Grid Corporation of India (PGCIL) was fully subscribed on Wednesday, the second day of the offering, provisional data from the stock exchanges showed.

Power Grid is offering 787.05 million shares, valued at around Rs7,083 crore ($1.1 billion), in its second follow-on stake sale.

The offer had received bids for 788.5 million shares, most of them from domestic and foreign institutional investors, before the markets closed for trading.

The company has set an offer price of Rs85 to Rs90 per share, with a discount of Rs4.5 for retail bidders and employees.

Details of the price bids were not immediately available.

The 787.05 million follow-on share offer comprises 4 per cent stake sale by the government, and a fresh issue of 601.9 million shares or 13 per cent stake by the company.

The sale of the 17 per cent stake could fetch around Rs7,083 crore at the upper end of the price band. The company may keep about Rs5,717 crore, while the government may receive around Rs1,758 crore.

Power Grid Corp proposes to use the  funds raised through this offer for capital expenditure on transmission projects.

With the share sale, the government's holding in the company will come down to 57.89 per cent from the present level of 69.42 per cent.

Citigroup, ICICI Securities, UBS, SBI Caps and Kotak Mahindra are merchant bankers for the FPO.

The issue closes on Thursday for institutional buyers and for other investors on Friday.

Shares of PGCIL closed at Rs93.75, up 0.37 per cent on the BSE.