PowerGrid's Rs 7,083 cr FPO opens tomorrow

MUMBAI: Power Grid Corporation of India Ltd ( PGCIL), which expects to raise Rs 7,083 crore through the follow-on public offer - to hit the market tomorrow - plans to utilise the proceeds partly to fund its 27 transmission line projects worth over Rs 48,354 crore.

The FPO for 17 per cent stake sale will open tomorrow and close on December 5 for institutional investors. For retail category investors and employees, it will close on December 6.

"The proceeds of the issue will be used to fund our 27 projects, which we have identified to strengthen the transmission network," Chairman and Managing Director of the state-owned firm R N Nayak told reporters here today.

The funds will also be used for corporate purposes, he said. The price band for the issue, where PGCIL will offer 78.70 crore shares, has been fixed at Rs 85-90 a share.

Of the 17 per cent equity stake sale, the government's share would be to the extent of 4 per cent, and issue of fresh equity shares is to the extent of 13 per cent of the pre-issue equity capital.

The company may garner close to Rs 5,717 crore, while the government will get around Rs 1,758 crore.

The government will sell its 18.51 crore shares, while the company will issue 60.18 crore fresh shares through the offer. Of the fresh shares, about 2.4 per cent will be reserved for the employees.

Nearly 50 per cent of the net issue is allocated to qualified institutional buyers, 35 per cent for retail category and 15 per cent for high network investors. Above 0.38 per cent of the issue is reserved for employees.