Power Grid Corporation of India , India’s largest power transmission company will be hitting the capital markets with it’s follow on public offer(FPO) in the month of November 2010.The FPO is expected to open on November 9th .The Power Grid FPO will close for the QIB segment on the November 11th 2010. For Retail & non-Institutional bidders the last date for sending in their bids will be November 12, 2010.
The company aims to raise about Rs 8,000 crore from it’s follow on public offer (FPO). The price band of the Power Grid FPO has not yet been revealed by the government.The Power Grid offer will comprise of over 84 crore (84,17,68,246) equity shares of Rs 10 each, which will constitute 20 per cent of existing paid-up capital.
Last week Power Grid Corporation announced a 41 percent increase in its net profit to Rs.651 crore for the second quarter of financial year 2010-11. The company’s net profit also increased to Rs.1,354 crore in first six months compared to the Rs.1,006 crore it reported in 2009.
The company plans to use the proceeds from the IPO for contructing a nationwide network of power transmission corridors which would cost it more than Rs 50,000 Crore.
In September 2007 , Power grid had come out with an IPO in the price band of Rs 44-52 a share. On it’s listing day the power grid stock debuted at around Rs. 90 and closed at the Rs. 100 level after touching a high of around Rs. 109 per share. Since then the stock’s performance has been lackluster and those who brought the stock at around Rs 100 have not made substantial gains.The stock eventually went on to touch a 52 week low of Rs 60 in November 2010 but not before the it touched an all time high level of Rs 160.
Share Price of Power Grid IPO since it’s Opening Date and Listing
Some analysts are of the view that the huge over subscription and success of the Coal India IPO may not be repeated in other PSU divestments like that of Power Grid. Investors could flock to the Power Grid FPO if the government offers the shares at a steep discount to it’s current market price.The price band of the Power Grid FPO will be the single most important factor which will attract retail investors.