Govt to divest 10% stake in PFC

The Planning Commission has given its nod to state-owned Power Finance Corporation to raise capital through a public offering in which government is also likely to offload up to 10 per cent stake this fiscal.

The ministry of power will take the proposal to the cabinet in the next 10-15 days. PFC had sought government's permission to raise up to 10 per cent equity of the total paid-up capital of Rs 1030 crore (Rs 10.30 billion).

The finance ministry is also understood to have cleared PFC's IPO along with divestment of government's stake of similar quantum, sources involved in the process said.

Given the equity base of Rs 1030 crore, PFC would raise equity by Rs 103 crore (Rs 1.03 billion) at face value.

According to sources, the Corporation expects to garner over Rs 1000 crore (Rs 10 billion) translating into over Rs 100 premium per share of Rs 10.

Clubbing both, IPO and divestment, PFC would mop up over Rs 2000 crore (Rs 20 billion), of which 50 per cent would go to government as divestment proceeds while PFC would utilise the remaining funds for expansion.

When contacted, Shyam Wadhera, director (projects), PFC, told PTI "The process to go for a public offering is on and we hope to get all clearances soon."

Asked when the Corporation would hit the capital market, Wadhera indicated it could be by June. He, however, declined to elaborate on the matter.