PFC awaiting govt nod for its 10 per cent stake sale

New Delhi, Aug 27 (UNI) Power Finance Corporation (PFC) has said it is awaiting clearance from the government for its proposed IPO which involves a sell-off of 10 per cent of its stake in the market this financial year.

PFC sources told UNI that the power ministry is expected to respond 'positively' in the next ten days after its request last week.

Earlier, the move was to sell 15 per cent stake of which 5 per cent was of the government. But the Department of Disinvestment (DoD) under the finance ministry asked PFC to scrap the 5 per cent sale of government equity.

PFC's existing networth is Rs 6,500 crore and its net profit for 2005-06 stood at Rs 970 crore. PFC officials say that infusion of capital would increase the company's networth besides helping it take higher exposure and borrowings to meet the demand from the power sector.

Under the draft red herring prospectus filed in June, PFC was offering an aggregate of upto 15.45 crore equity shares of Rs 10 each for cash at a price to be decided through the book building process.

The offer included upto 10.30 crore equity shares and an offer for sale upto 5.15 crore equity shares by the government.

The issue would have constituted about 13.64 per cent of the post issue fully diluted equity share capital of PFC.

The power ministry is currently seeking approval for initial public offers of PFC, NHPC, REC and powergrid in this fiscal without offloading any government stake in the companies as the disinvestment programme is presently on hold.

PFC had in June this year filed a draft prospectus with market regulator SEBI for the proposed IPO, but the issue was delayed after Prime Minister Manmohan Singh put on hold all disinvestment decisions.

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