The initial public offer of Power Grid Corporation of India Ltd (PGCIL) received an overwhelming response from domestic as well as overseas investors. The company received bids worth nearly Rs 2,00,000 crore for an issue size of only Rs 2,984 crore.
The issue, which closed on Thursday, received a particularly robust response in the Qualified Institutional Buyers (QIBs) category, especially from foreign institutional investors (FIIs). The QIB portion, which was 50 per cent of the issue size, was oversubscribed 115 times, 70 per cent of which was from FIIs.
The issue was made approximately 13.64 per cent of the company's fully diluted post-issue capital. Post issue, the government will continue to hold 86.36 per cent equity stake in the company.
The overwhelming response is clearly an indication of investors' confidence in the power sector where reforms are being reflected at the ground level, said Yogesh Kapur of Enam Financial, which is among the book runners with Kotak Mahindra Capital Company and Citigroup.
Power Grid is the third central power utility to tap the capital markets for funds, after NTPC in 2004 and Power Finance Corporation early this year. Three out of the five big issues in the last couple of years have been from the power sector.
Power Grid will use the proceeds to part finance 15 projects — at a total investment of Rs 12,280 crore — that would allow it to enhance its transmission system by 13,022-circuit km. It currently owns and operates 61,875-circuit km of transmission lines.