PowerGrid Corporation’s (PGCIL) next public offering of Rs8,000 crore is set to enter the market in the second week of November 2010. This would be second major issue after the largest-ever IPO of Rs14,000 crore by Coal India in the current fiscal.Earlier this year, the government completed two divestments NHPC and Engineer India for Rs1,079 crore and Rs980 crore, respectively. PGCIL issue is being slotted before that of Hindustan Copper as its issue size is significant, and the government wants to complete the larger transaction on a priority basis, said a senior official in the disinvestments ministry.“Besides, in case of Hindustan Copper, since the public float is 0.41%, the entire exercise would be similar to that of an initial public offer,” he added.The proposed issue of PowerGrid will be under fast track route, in which a company can enter the capital market immediately after filing the draft red herring prospectus (DRHP) with market regulator SEBI, said an investment banker involved in the issue. PGCIL chairman and managing director SK Chaturvedi told ET that the company planned to enter the market in November.PowerGrid is expected to file the DRHP shortly after October 6 when it completes its three years listing period on the Indian bourses. “It will compete three years of listing on October 6 and has the free float of more than Rs5,000 crore, which is the mandatory requirement for the fast track issue,” he added. At current price of Rs104.75 per share, PowerGrid has a market capitalisation of Rs44,087 crore and public float of 13.4%.The proposed issue comprises a 10% divestment by the government and similar amount of fresh issue by the company.
The proposed FPO will also help the company in meeting new listing guidelines of a minimum public float of 25%. Currently, government’s holding in Power grid is 86.36%, which will come down to 69.43% after the issue.
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