New Delhi, July 22: India Thursday gave its nod for a follow-on public issue of the state-run Power Grid Corp constituting 20 percent of its paid-up capital. Of this, 10 percent will be for government divestment and the remaining as fresh equity issue.
Based on the price of Rs.105.50 per share of the company quoting on the Bombay Stock Exchange (BSE) Thursday, the quantum of the 20 percent equity issue will work out to around Rs.8,500 crore ($1.88 billion).
"Additional resources generated through the issue will be utilized by Power Grid Corp in its investment programmes," an official statement said, after a meeting of the Cabinet Committee on Economic Affairs, presided over by Prime Minister Manmohan Singh here.
The company needs funds to the tune of Rs.4,200 crore for capital expenditure during the remaining tenure of the current Five Year Plan (2007-12). The issue will also meet the regulator's requirement of 30 equity contributions during the period.
Power Grid went for a maiden issue of 10 percent fresh equity and 5 percent divestment of government shares in October 2007 through the book building process. The issue was subscribed 64.50 times.
The shares got listed in the National Stock Exchange and the Bombay Stock Exchange Oct 5 after the company raised Rs.2,984 crore at a price of Rs.52 per share. Of this, the government was paid Rs.995 crore.
The state-run utility is engaged in power transmission business with the mandate for planning, coordinating and supervision inter-state flow of electricity. It owns and operates about 71,600 conductor km of transmission lines.
About 45 percent of the power generated in India is wheeled through this network.