Government-owned transmission utility company Power Grid on Monday announced that it plans to raise R7,600 crore ($ 1.7 billion) through a follow-up public offer (FPO).
The company, which is already listed, will hit the capital market with a 12-17% discount at the current prices (on capital market).
Power Grid will dilute 20% stake in the company. “The offering consists of fresh equity issue of 10% by the company and another 10% by the government,” Rakesh Jain, joint secretary and finance adviser, Ministry of Power said.
The issue price for the FPO has been fixed around R85-90. This is at around 12% discount on stock’s closing price on Friday. Retail investors will be offered another 5% discount on the issue price, the company said in a statement on Monday.
Following the announcement, the stock price of Power Grid dipped 3.6% to close at Rs 98.35. It is expected that the stock price of the company will reduce further and settle around the FPO issue price.
The share sale opens on Tuesday and closes on Friday for retail investors. For qualified institutional buyers the sale closes on Thursday.