Power Grid Corporation of India Ltd (PGCIL), the country’s biggest transmission utility, on 22 August filed its red herring propectus with market regulator Sebi for its initial public offer to raise an estimated Rs580 crore.
PGCIL is the third central power utility to tap the capital market for raising funds after NTPC Ltd in 2004 and Power Finance Corporation early this year. Like NTPC and PFC, the government will piggyback on PGCIL IPO to divest five per cent of its stake. While NTPC had raised around Rs 5,400 crore, PFC had mopped up nearly Rs 1,000 crore. Power Grid is expected to mobilise up to Rs 580 crore, sources said.
Power Grid Corp is raising funds from the market to part-finance its expenditure requirements. The country’s transmission sector requires an estimated investment of Rs 70,000 crore during the 11th plan and central utilities led by PGCIL are expected to contribute as much as Rs 50,000 crore.
The public issue comprises 57.39 crore equity shares of Rs 10 each. This includes a fresh issue of 38.26 crore shares by PGCIL and an offer for sale of 19.13 crore shares by the government. About 1.39 crore shares have been reserved for employees and the net issue to public is 55.99 crore shares.
The IPO would constitute 10% of the equity capital and government is divesting 5%of its holding.
The company will issue shares at a price to be decided through the book building process and the shares will be listed on Bombay Stock Exchange and National Stock Exchange.
Kotak Mahindra Capital Company Ltd, Citigroup global Markets India and Enam Financial Consultants are the book running lead managers to the issue.