UBS, SBI Caps and Kotak Mahindra are merchant bankers for the FPO.
This is the second follow-on offering from Power Grid, which sold a 10 per cent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs 90 a share.
The company hit the capital market with an initial public offering in October 2007.
So far in the current fiscal, the government has raised over Rs 1,300 crore through minority stake sale in PSUs. It has set a target of Rs 40,000 crore from disinvestment in the current fiscal.