CCEA likely to take up Power Grid FPO tomorrow

Written By Unknown on Rabu, 06 November 2013 | 23.25

The Cabinet Committee on Economic Affairs may tomorrow take up the power ministry's proposal for a follow-on public offer of state-run Power Grid Corporation of India , which is expected to mop up over Rs 7,500 crore.

According to sources, the proposal is likely to be considered during the CCEA meeting tomorrow. The follow-on public offering (FPO) will comprise 13 per cent fresh equity by the public-sector company and 4 percent stake sale by the central government.

The company will issue fresh 60.18 crore shares through the offer and a part of it would be reserved for the employees. Meanwhile, the Department of Disinvestment has invited applications from merchant bankers for the proposed FPO.

Also Read: PowerMin awaits comments on hiving off POSOCO

The government proposes to dilute 4 percent stake, or 18.51 crore shares, out of its current 69.42 percent holding. At current prices, the government could get over Rs 1,782 crore from the disinvestment, while the company would get over Rs 5,793 crore from the sale of fresh equity. This would be the second follow-on offering from Power Grid, which sold a 10 percent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs 90 a share.

The company hit the capital market with its initial public offering in October 2007.


Power Grid Corp stock price

On November 06, 2013, Power Grid Corporation of India closed at Rs 96.25, up Rs 0.90, or 0.94 percent. The 52-week high of the share was Rs 122.45 and the 52-week low was Rs 86.70.


The company's trailing 12-month (TTM) EPS was at Rs 9.76 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 9.86. The latest book value of the company is Rs 56.68 per share. At current value, the price-to-book value of the company is 1.70.


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