Power Grid shares sink 12% on stake sale plans

MUMBAI: Shares of Power Grid Corporation of India Ltd ( PGCIL) today closed with nearly 12 per cent loss on reports that the company plans to offload 15 per cent stake.

After plunging 15.78 per cent to 52-week low of Rs 86.70 on the BSE in intra-day trade, the scrip finally ended at Rs 91.05, down 11.56 per cent from its previous close.

At the NSE, the stock tumbled 11.52 per cent to Rs 91. Following the dip in the scrip, market value of PGCIL dived Rs 5,510 crore to Rs 42,153 crore.

"OFS buzz may have pulled down the stock," said Kishor Ostwal, CMD, CNI Research.

PGCIL, which yesterday reported nearly 20 per cent jump in net profit at Rs 1,040.34 crore in the first quarter of the current financial year, plans to sell 15 per cent stake in the company.

Looking to raise funds for its investment plans, the company's board yesterday approved 15 per cent stake sale through Follow on Public Offer.

"The Board of Directors of the company at its meeting held on August 01, 2013, have approved the FPO of 15 per cent of existing paid up share capital comprising fresh issue of 69,44,58,802 equity shares," the company had said yesterday in filing to the BSE.

At yesterday's closing price of Rs 102.95 per scrip, the proposed FPO would fetch more than Rs 7,100 crore.

According to Power Grid, the proceeds would be utilised for augmenting resources to fund its investment programme.

The proposal would be subject to necessary approval of the government.