PTC India to launch finance unit IPO by mid-March

Power trader PTC India plans to launch the initial public offering of its financial services unit by the middle of next month, its chairman said, a sign that firms are still upbeat about investor appetite despite a weak run in the markets this year.

The company's holding in PTC India Financial Services (PFS) will drop to 60% after the IPO from 77.6% now, T.N. Thakur told reporters on Thursday.

GS Strategic Investments, a unit of Goldman Sachs and Macquarie India Holdings, a unit Macquarie Group Ltd, each hold 11.20% of PFS.

Earlier this month, sources told Reuters that PTC will raise up to Rs 6 billion (USD 132 million) by listing the unit, and that it had got the final regulatory approval.

"The funds will be used for the company's growing operations...it will improve our debt raising ability and credit ratings," Thakur said.

"Once you do the IPO, for subsequent (fund) raises, you have a benchmark," he added.

Avendus Capital, SBI Capital Markets, JM Financial Services, ICICI Securities and Almondz Global Securities are the arrangers to the issue.

The financial unit could get USD 50 million via a loan for 11 years from International Finance Corp, he said, adding it also entered into an agreement with Germany's DEG for a USD 26 million, 12-year loan.

PFS posted a profit of Rs 254.52 million, on total income of Rs 534.90 million for fiscal 2010, according to the draft red herring prospectus it filed with the Securities and Exchange Board of India.

State-run utilities NTPC, NHPC, Power Grid and Power Finance Corp own stakes in PTC India.

At 2:20 PM, PTC India shares, valued at about USD 550 million, were down 3.7% at Rs 80.75. Indian shares, down more than 11% this year, were down about 2%.