Power Grid follow-on issue was subscribed 1.08 times on the first day of the offer on Tuesday, data from the exchanges showed. Of the 814 million shares on offer for sale, a total of 905 million bids were received on the NSE and the BSE.The issue closes on Friday.
The already listed public sector undertaking company began share sale on Tuesday to raise up to Rs 8,000 crore.
The government has set a price band of Rs 85-90 for the issue, which is a 12-17 per cent discount on 6, November, Friday’s closing. The share price dropped 3.6 per cent on Monday after the announcement of the FPO which will be offered at a 5 per cent discount to retail investors and employees of the company.
Power Grid is the third-largest power transmission company in the world and plans to double the capital expenditure in the 12th five year plan starting April 2012 to Rs 1 lakh crore. During the 11th plan period, the company plans to spend Rs 55,000 crore of which it has already spent Rs 25,400 in the first three years. In 2010-12, it is likely to spend Rs 12,900 crore and the balance in 2011-12.
Power Grid posted a 42 per cent jump in net profit in the quarter ended September 2010 to Rs 650 billion. Goldman Sachs, JPMorgan, SBI Capital Markets and ICICI Securities are lead managers for the issue.
At present, the Union government holds 86.36 per cent of the issued and paid up equity capital of the company. After the Issue, government’s shareholding would drop to 69.42 per cent.
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