The Rs 7,028–7,442 crore follow-on public offer (FPO) of state-run Power Grid Corporation of India was sold out on Tuesday, Day One of the issue, with institutions bidding for the shares. The issue was subscribed 1.08 times, according to the National Stock Exchange (NSE) website though the retail and the HNI quotas saw less than 10% subscription. This is the best response any FPO has received on the first day in this calendar year. The REC FPO had received 29% subscription on Day One, while NTPC was subscribed to the extent of 77% and NMDC received was subscribed by 17%. Engineers India didn?t receive too much of a response on the first day. ?The response received on the first day is an indication that the issue will do well,? said S Vishvanathan, MD and CEO, SBI Capital Markets.
The price of the Power Grid stock, after declining about 4% on Monday, gained 5% on Tuesday to close at Rs 103.25 on the NSE. Interestingly, the counter clocked huge volumes around of 21 million shares (55% of which was market for delivery) compared with the daily average volume of 2.6 million seen in the past one month. The new shares are being offered in the range of Rs 85-90 apiece. The over 841.7 million share offering received bids for over 905 million shares, 5.5 million of which came in at the cut-off price, or the price at which the shares will finally be allotted. The QIBs category, which comprises FIIs, mutual funds and insurance companies, was subscribed 2.09 times, receiving over 875 million bids. Interestingly, about 65% of it came from domestic institutions while the remaining came from foreign investors.
The non-institutional investors segment, which includes corporates and high net worth individuals (HNI), was subscribed to the extent of just 9%.
To invest Rs 58,000 cr
Kolkata: PowerGrid has firmed up plans to invest Rs 58,000 crore to facilitate open access through nine high capacity transmission corridors across the country, while also exploring business opportunities in the telecommunication sector through renting out towers to both telecom and tower companies. IS Jha, director, projects, PowerGrid, said the first high capacity transmission corridor with 765 kv line, capable of carrying 4000 mw, would be in place by 2012.