Power Grid Corp FPO : Planning an FPO soon

by khalid on 07/07/2010 · 0 comments

Power Grid Corporation is planning to come up with its Follow-on Public Offer (FPO) in near future. The company wants to shed 20 per cent of its paid up capital through this FPO. Power Grid Corporation of India Limited (PGCIL), a Navratna state-owned company, is one of the largest transmission utilities in the world. Power Grid Corporation had come up with an Initial Public Offer (IPO) in September 2007 in a price band of Rs 44 to Rs 52 per equity share and the Issue Price was fixed at the upper level pf the price band as Rs 52 per equity share. The current market price of Power Grid Corporation of India Limited share is Rs 102.05 on 6th July 2010, a 100% gain over the issue price of IPO.

This FPO is essential for the company as per the Government mandate that public sector companies should have atleast 75 per cent public holding. All the public sector companies are bound to this Government Order and will dilute their share holding within this financial year. According to the Company’s website, Power Grid Corp. has around 77,000 Circuit Kms of Transmission network and 124 nos. of EHVAC & HVDC sub-stations with a total transformation capacity of 89,000 MVA. Power Grid has also diversified into Telecom business and established a telecom network of more than 21,000 Kms across the country.

Power Grid Corporation of India Limited (PGCIL) is held 86 per cent by the Government and the company has to bring down this to 75 per cent. The FPO is subject to the approval of the Cabinet Committee on Economic Affairs (CCEA).

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