HomeNewsTrendsExpert ColumnsPFC fresh issue for long-term investor: Expert

PFC fresh issue for long-term investor: Expert

From a valuation perspective, PFC’s offer price at the lower end of the price band discounts its 2010-11 earnings per share (EPS) of Rs 22.82 8.5 times. It has a book value of Rs 134.28.

May 10, 2011 / 13:58 IST
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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

Price Range

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
first published: May 10, 2011 01:22 pm

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