Company background:
Power Grid Corporation of India Ltd (PGCIL) started operations in 1992 as a part of the Government of India’s (GoI) initiative to consolidate all the interstate and interregional electric power transmission assets of the country in a single entity. As on June 30, 2007, PGCIL owns and operates 61,875 circuit kilometers of electric transmission lines and 106 electrical substations. This makes PGCIL India’s principal electric power transmission company, which owns and operates most of
PGCIL has completed 101 transmission projects on its own aggregating to a value of Rs 25,181 crore. As on June 30, 2007, the company has 45 transmission projects in various stages of implementation and plans to invest another Rs 55,000 crore in transmission projects during the Eleventh Five Year Plan (2007-2012). It currently manages the national power grid with inter regional capacity of 14,100 mega watt (MW), which shall be enhanced to more than 37,000MW by 2012. The tariffs for PGCIL’s transmission projects are determined by the Central Electricity Regulatory Commission (CERC), pursuant to the electricity and CERC regulations. The transmission tariffs are presently determined on cost-plus tariff basis.
The company also holds stakes in public-private joint ventures established for the development of dedicated private transmission lines. It has a 26% stake in Torrent Power Grid and a 20.63% equity stake in Jaypee Power Grid. The partners in these ventures are Torrent Power and Jaiprakash Hydropower respectively. The company has also developed a 2,000MW Tala transmission project through a joint venture in which PGCIL and Tata Power Company have a stake of 49% and 51% respectively.
Objective of the issue:
The issue of 57.39 crore equity shares (of which 38.26 crore is fresh issue and 19.13 crore is offer for sale by the Government of India) is aimed at raising Rs 2,525.3 crore to Rs 2,984.4 crore (depending on the price band of Rs 44-52 per share). The objectives of the issue are:
· To achieve the benefit of listing the equity shares on the stock exchanges
· To meet the capital requirement for certain identified transmission projects
· For general corporate purpose
Issue details:
· Issue opens: September 10, 2007
· Issue closes: September 13, 2007
· Issue size: 57.39 crore-equity shares
· Reservation for employees: 1.39 crore shares
· Fresh issue to public: 55.99 crore shares
· Face value: Rs 10 each
· Break-up of fresh issue to public:
- QIB's portion : 27.99 crore shares
- Retail portion : 19.59 crore shares
- Non-institutional portion : 8.39 crore shares
· Price band: Rs 44-52
· Verdict: SUBSCRIBE
