PowerGrid FPO price band at Rs 85-90

The government on Sunday fixed price band at Rs 85-90 per share for the about Rs 7,600-crore follow-on public offer (FPO) of state-run transmission company Power Grid Corporation of India.

"The price band for PowerGrid has been fixed between Rs 85-90," Power Minister Sushilkumar Shinde said after a meeting of Group of Ministers here.

The FPO comprises over 84 crore (84,17,68,246) equity shares of Rs 10 each, constituting 20 per cent of existing paid-up capital. At the upper end of the price band the issue will fetch up to Rs 7,600 crore.

The follow-on public offer of the company hits the market on November 9. The bid closes on November 11 for institutional investors and November 12 for retail and non-institutional bidders.

The company plans to raise 10 per cent fresh equity, while the government is likely to offload 10 per cent of its 86.36 per cent stake in PowerGrid.

Besides disinvestment of the government stake, the fresh capital raising would be used for part-funding investment requirement of about Rs 58,000 crore of the public-sector unit.

The PSU has already tied up 86 per cent of the funds required for its capex plan and the remaining amount will be raised through the FPO and bonds issues.

The company aims to augment transmission capacity to 23,400 megawatt (Mw) in the current financial year from 19,800 Mw at present.

On the transmission side, the company had been awarded Rs 7,000-crore worth of projects. It hopes to bag projects worth Rs 14,000 crore in the year.

The company had hit the capital market in October 2007, with its maiden public offer. The government had divested 5 per cent of its stake in the company at the time.

Shares of PoweGrid closed at Rs 102 a piece on the Bombay Stock Exchange on Friday last week.

This is going to be the first public offer after huge success of Coal India's initial public offer, that raised record Rs 15,200 crore last month.

The world's largest coal producer made a stellar debut on the bourses, ending 43 per cent higher at Rs 349.65 a share on the Bombay Stock Exchange, against the issue price of Rs 245 a share.