In a move that may result in a dilution of equity stakes held by its current public sector promoters to a total of less than 14 per cent, the country's largest power trading company, PTC Ltd, has decided to mop up Rs 1,200 crore with a fresh issue of equity shares.
PFC currently has a market capitalisation of Rs 960 crore.
Four public sector power utilities -- NTPC, NHPC, the Power Finance Corp and Power Grid Corporation -- together currently own 32 per cent (8 per cent each) in PTC. Talking to the Hindustan Times, TN Thakur, chairman and managing director of PTC said his board had unanimously approved the Rs 1,200-crore share issue.
“However, we have not yet decided on the modality of the instruments. In case the promoters wants to retain their stakes, we may issue fresh shares on a preferential basis,” Thakur said. On the issue of pricing of such a preferential issue, Thakur said that it would follow guidelines issued by the Securites and Exchange Board of India. This in effect means that the preferential issue can be possible only at the current market price.
But the PSUs that may want to go for preference shares are reluctant to go at the current market price because each of the three promoter copanies would need to fork out Rs 100 crore to retain its current holding at around 10 per cent.
Besides the PSU promoters, Tata Power is the singlee largest shareholder in PTC, with 10.47 per cent. Among other leading investors are the Damodar Valley Corporation (6.67 per cent), LIC (2.67 per cent), Singapore-based Row Price International Inc (7.8 per cent), Morgan Stenley (4.79 per cent), JP Morgan Asset Management (3.5 per cent) and USB Securities Asia Ltd (2.01 per cent)
Besides investing in the existing business, the company would invest Rs 150 crore in PTC Financial Services Company, an affiliate. “To begin with, it will be a wholly owned subsidiary, but we we will rope in strategic partners in the company over then next 2 to 3 years. However, we will retain our stakes at aminimum of 26 per cent," Thakur said.
In addition to this, the company plans to invest a part of the proceeds in the equities of some independent power producers (IPPs). The company has also signed memorandums of understanding with some IPPs for greenfield projects involving an installed capacity of 7,000 megawatts.