Public Offer for PGCIL shares approved

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New Delhi, July 22 (ANI): The Cabinet Committee on Economic Affairs on Thursday approved the Follow-on Public Offer (FPO) of Power Grid Corporation of India Limited (PGCIL) of 84,17,68,246 equity shares of Rs.10 each constituting 20 percent of existing paid-up capital.

This comprises fresh issue of 42,08,84,123 equity shares and offer for sale of 42,08,84,123 equity shares by selling shareholder.

Additional resources generated through the issue of an FPO will be utilized by PGCIL in its investment programmes.

PGCIL will be required to approach the capital market for raising funds through issue of fresh equity for funding its investment programme commencing from financial year 2010-11.

The requirement of funds to be raised through issue of fresh equity for funding the capital expenditure for the balance XI plan period will be in the order of Rs 4200 crore.

The fresh issue of FPO would result in the PGCIL meeting with the CERC allowed norms of 30 percent equity contributions during the XI Plan period.

PGCIL went for a maiden Initial Public Offering (IPO) of equity shares consisting of issue of fresh equity shares with 10 percent of paid up capital and disinvestment of Government of India equity holding of five percent of paid up capital in October 2007 through the book building process and the issue was subscribed 64.50 times.

The shares of the PGCIL got listed in the National Stock Exchange and Bombay Stock Exchange on 5.10.2007.

PGCIL raised Rs. 2984 crore at the issue price of Rs. 52 per share out of which Rs. 995 crore was paid to the Government of India towards the disinvestment proceeds and the balance amount, after meeting the issue expenses, was utilized for capital expenditure of identified projects during the financial year 2007-08 and 2008-09. (ANI)

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