PFC fresh issue for long-term investor: Expert

By VS Fernando, IPO Analyst at India Aarthik Research

Power Finance Corporation (PFC), a government company, is offering shares to the public in the price range of Rs 193-203/share. It has a high growth potential and the pricing is reasonable from a medium term perspective.

Given that the company finances long-gestation projects, it is more likely to be a steady long-term compounder of your money rather than something to offer immediate gains. The retail discount of 5% increases the comfort level of individual bidders.

OFFER AT A GLANCE
Name	Power Finance Corporation Ltd
Offer Quantity	22.95 cr eq shares of Rs 10 each comprising: a) Fresh issue of 17,21,65,005 eq shares and b) Offer for sale of 5,73,88,335 eq shares
PriceRange	Rs 193 to Rs 203
Offer Amount	Rs 4,429 cr to Rs 4,659 cr.
Bid Quantity	28 eq shares & in multiples of 28
Bid/Offer Opens	May 10, 2011
Bid/Offer Closes	May 13, 2011
Lead Managers	DSP Merrill Lynch, Goldman Sachs India, ICICI Securities, JM Financial
Registrars	Karvy Computershare

Issue Objective

The objective behind the fresh issue of equity is to augment the capital base, comply with capital adequacy norms and meet future capital requirements. The offer for sale is to carry out the government of India