The UPA Government has started diluting the centre's stake in major state-owned power companies without resorting to divestment. The Power Finance Corporation (PFC) will offer a 10% additional equity through an Initial Public Offer (IPO) that will open on January 31. The offer would close on February 6. Post offer, the government's equity in the company will be reduced to 89.78%. The PFC hopes to mobilize Rs. 1000 crores through the first public offer of its 11.73 crore shares through a 100% book building process. The company has fixed a price band of Rs. 73 – 85 per share. Book value has been estimated to be Rs. 67 per share. Enam Financial, ICICI Securities and Kotak Mahindra Capital have been retained as the book running lead managers for the issue.
With the PFC IPO opening shortly, the Government's move to mobilize funds for power sector has begun. In the next three months, the centre proposes to dilute its stake in three other major power companies by 10% each. The other companies that are in the process of lining up public offers include Power Grid Corporation of India Ltd (PGCIL), National Hydroelectric Power Corporation (NHPC) and North Eastern Electric Power Company (NEEPCO).
Read the article in The Economic Times.
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