Power Grid to come out with IPO before '06-end

The public offer could be on lines of other power sector companies like NTPC and Power Finance Corporation.

State-owned transmission giant Power Grid Corp said on Thursday that it will come out with an initial public offering by the end of this year.

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"We are looking at an IPO. We think it will definitely be before the end of 2006," Power Grid Chairman and Managing Director RP Singh said.

Although no decision has been taken by the government so far, the public offer could be on lines of other power sector companies like NTPC and Power Finance Corporation, he said.

Both NTPC, which was listed on the bourses in November 2004, and PFC, which plans to hit the market by June this year, followed the same model in which the government divested some equity  issue of fresh shares.

Singh, however, declined to say how much the company was expecting to raise from the issue or the likely price band.

The company had a paid up equity of 3,200 crore rupees and a net worth of about Rs 8,500 crore, he said after signing an agreement with Orissa Power Transmission Corporation Ltd for building a grid line in the state.

NTPC had issued 5.25 per cent new shares and the government also divested 5.25 per cent of its stake. In the case of PFC, government is divesting 5 per cent alongwith the company's issue of 10 per cent fresh shares. A fresh equity of 10 per cent by PGCIL would mean that it could raise about Rs 320 crore on a face value of Re 1 a share.

PGCIL had recorded a net profit of Rs 725 crore in 2004-05 and Rs 748 crore in 2003-04. The company recorded a turnover of Rs 2,788 crore during 2004-05, compared with Rs 2,805 crore during 2003-04.