State-run Power Finance Corp Ltd (PFC), a Navratna financial institution, will raise around Rs 4,700 crore through a follow-on-public offer (FPO) as the Government revives its disinvestment programme for FY 12.
It is the first divestment by the Government in the current financial year. Finance Minister Pranab Mukherjee had announced plans to raise Rs 40,000 crore through divestment programme in FY 12.
The Government has fixed the price band at Rs 193-203 per share for the PFC issue, which opens tomorrow. The firm, a lender to power projects, is offering a discount of 5 per cent to the issue price to retail bidders and eligible employees.
The FPO, which opens on May 10 and closes on May 13, comprises a fresh issue of 172,165,005 equity shares and an offer for sale of 57,388,335 equity shares by the Government.
The Government is disinvesting 5% of its stake in the public sector company, which is raising 15% fresh equity.
The Government holds about 89% stake in PFC after divesting 10% through an initial public offering (IPO) in March 2007.
PFC said it intends to utilise the issue proceeds for augmenting capital base to ensure compliance with requisite capital adequacy norms and for future capital requirements.
Power sector, a key infrastructure area, is perceived as the main driver of India''s higher economic growth. The 11th Plan (2007-12) targeted 78,700 MW installed power generation capacity addition, while the 12th Plan (2012-17) aims at adding 1,00,000 MW. .
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