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Home News Power Sector News Rs 8,600 crore Powergrid FPO in November 2010

Rs 8,600 crore Powergrid FPO in November 2010

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PowergridState-run transmission company Power Grid Corporation said that its follow-on public offer (FPO), which aims to raise about Rs 8,600 crore, would hit the market in the second week of November.The issue will closely follow the initial public offer of Coal , one of the largest equity offering, in the third week of October. The company's shares rose 1.6% on the National Stock Exchange even as the Nifty declined 0.63%.

Government wants to bring state-run companies quickly to the market to take advantage of bullish sentiment. "In all likelihood, in the second week of November, we will be able to bring our FPO. We are hopeful of raising Rs 8,600 crore of which Rs 4,300 crore would go to the government and the remaining would come to us," Mr Chaturvedi said on the sidelines of a power conference organised by IEEMA (Indian Electricals & Electronics Manufacturers Association) and Powergrid.

The Powergrid issue will see government divest 10% stake and a fresh equity offer of 10% fresh equity by the company.

The company proposes to utilise the funds from FPO for its projects in the remaining period of the current plan period (2007-12) and for the initial projects in the 12th plan starting April, 2012.

It has appointed ICICI, SBI Cap, and as its merchant bankers for the FPO.

On its plan to lease transmission towers to telecom companies, Mr Chaturvedi said that the company will invite bids from telecom companies in the next four months and award the contracts by the end of this fiscal.

Powergrid owns over 1,50,000 power transmission towers across the country, with almost 70% of them located in semi-urban and rural areas, which will make it the largest telecom tower company in the country. Its backbone could be used by telecos to roll out their services in far flung rural areas.

"The company has estimated a revenue potential of Rs 350-400 crore from the telecom business in the next 4-5 years," said Mr Chaturvedi.

Powergrid is one of the largest transmission utilities in the world with a network of about 74,297 circuit kms of transmission lines. The company has already set up a national grid with inter regional power transfer capacity of around 20,800 MW, which is being enhanced to 32,000 MW by 2012. It is investing Rs 55,000 crore in Eleventh Plan to carry out the expansion plan.

 

Source- Economic Times

 

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