The follow on public offer of state-run Power Finance Corporation will open on May 10,making it the first disinvestment by the government this fiscal. The disinvestment in Power Finance Corporation (PFC),which provides financing to the power sector,is expected to raise about Rs 6,000 crore. In a public announcement on Monday,PFC said the offer would start on May 10 and closes on May 13. The FPO comprises fresh issue of 17.21 crore equities and the government offloading about 5.74 crore shares in the company. For the qualified institutional buyers (QIBs),the offer would close on May 12. The government holds about 89 per cent stake in PFC,after divesting 10 per cent through an initial public offering in March 2007. For this fiscal,the government has set a target of mopping up Rs 40,000 crore through disinvestment in public sector entities. In 2010-11,amount raised through disinvestments stood at more than Rs 22,700 crore. Last year,PFC was given infrastructure finance company status - a move that enabled the entity to mop up funds through issue of tax-free infrastructure bonds. In April,the board of directors of PFC had approved the Red Herring Prospectus (RHP) for the proposed FPO. BofA Merrill Lynch,Goldman Sachs,ICICI Securities and JM Financial are among the book running lead managers for the offer. Shares of PFC closed marginally up at Rs 231.70 on the Bombay Stock Exchange and as on today,it had a market capitalisation of Rs 26,593 crore. Apart from PFC,the government has also approved the proposed disinvestments in Oil & Natural Gas Corporation (ONGC),Steel Authority of India Ltd and Hindustan Copper Ltd. ONGC's public offer in 2003-04 that raised Rs 10,542 crore has been the largest FPO by a public sector enterprise.
