Power Finance Corporation's follow-on public offer gets cabinet nod
10 February 2011
The cabinet committee on economic affairs (CCEA) has approved the follow-on public offer (FPO) of Power Finance Corporation (PFC), which is expected to fetch around Rs5,700 crore at current stock prices.
Shares of the company were trading at Rs249.7 each, down 2.44 per cent from previous close in the afternoon trade on the Bombay Stock Exchange.
PFC will offer a total of 22,95,53,340 shares, consisting of fresh issue of 17,21,65,005 equity shares of face value Rs10 each constituting 15 per cent of pre-issue existing paid-up capital and 5,73,88,335 equity shares of Rs10 each representing disinvestment by Government of India of 5 per cent of pre-issue paid-up capital of the company.
PFC will reserve up to 0.12 per cent of the equity issue for subscription by its employees, subject to the limit prescribed for retail investors by SEBI.
Employees and retail investors are eligible for a discount of 5 per cent of the offer price.
The fresh issue of equity shares would enable PFC to meet the eligibility requirement of maintaining a Capital to Risk Assets Ratio (CRAR) of 15 per cent for Industrial Finance Company (IFC) status and to enhance equity base to enable it to meet the growing future investment needs of the power sector, the company said in a release.