Power Min seeks Cabinet nod for 24% PFC IPO

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With disinvestment on hold, Power Ministry has sought Cabinet approval for issuing up to 24% fresh equity by Power Finance Corporation, PFC in its initial public offer, IPO as against 10% decided earlier, reports Business Standard.

"The Power Ministry has moved a cabinet note that seeks clearance for 24% fresh equity by PFC in the IPO," a government source said.

The source said the proposal for 24% was an enabling provision to issue upto 25.7% share. But PFC would initially hit the stock market to raise its equity base by only 10%, amounting to 10.3 crore shares, he said.

When contacted, union power secretary R V Shahi confirmed circulating the note to the Cabinet, but did not give details.

"We have moved the Cabinet note. The IPO will happen within this financial year," Shahi said.

The new note is in contrast to the earlier proposal approved by the Cabinet in January this year, which included issue of 10% fresh equity along with sale of 5% equity stake by the government.

But the company could not proceed with the issue after the government put on hold all divestment decisions due to opposition from Left parties and DMK.

PFC, which had filed the draft prospectus with Securities and Exchange Board of India in June to offer 15.45 crore equity shares, would now have to submit a revised prospectus to the market regulator after it gets the Cabinet nod.

The company is only the second central power PSU to come out with an IPO after generation major NTPC. The ministry also wants other PSUs like NHPC, Power Grid Corp and Rural Electrification Corporation, to list on bourses.