Four initial public offerings by state-owned companies are set to raise between Rs 4,000 crore and Rs 5,000 crore, despite a bloodbath in this segment in the recent past.
Three central public sector enterprises have filed draft prospectuses for issue of shares in quick succession. National Hydroelectric Power Corporation (NHPC) flagged off the process on April 5, followed by Bharat Earth Movers Limited (BEML) on April 12 and Power Grid Corporation of India Ltd (PGCIL) on April 17. Next in line is Rural Electrification Corporation, which has already appointed lead managers for the float.
Though at this stage the pricing of the issues are not indicated, the four together are expected to raise between Rs 4,000 crore and Rs 5,000 crore, according to merchant bankers.
“This is very good for the IPO market. After the recent slaughter of public issues, supply of good issues, rightly priced, will be great for a market starved of quality paper,” said Navjeet Sobti, managing director, Allianz Securities.
BEML proposes to issue 4.9 million shares, which will constitute 11.77 per cent of the company’s post-issue equity capital. The government holding will come down to 54 per cent from the current holding of 61.23 per cent. NHPC and PGCIL will issue 5 per cent shares to the public apart form the 10 per cent of equity divested by the Government. PGCIL’s present paid-up capital is Rs 3,800 crore and NHPC’s Rs 10,860 crore.
Power Finance Corporation’s IPO early this year was oversubscribed 73 times. The share listed above the issue price of Rs 85 and has continued to stay above Rs 100.
Apart from these four, other state-owned firms could be lining up IPOs, said merchant bankers. “Southern Coal Fields and Eastern Coal Fields apart from other State PSUs in the mineral and mine sector,” said B Madhuprasad, managing director, Keynote Corporate Services.