PFC expects maiden float by March

Power Finance Corporation (PFC) is hopeful of hitting the market with its initial public offer (IPO) in the current fiscal (by March 2007).

"We have already got government approval and are awaiting Sebi approval," said chairman and managing director V K Garg.

The company has got approval to offer up to 10 per cent stake to the public.

There will be no sale of existing shares owned by the government, since this was opposed by key members of the ruling coalition, which led to the deferment of the IPO planned earlier this year.

However, government stake will be diluted as new shares are issued for the IPO. The book value works out to Rs 62 a share. "The premium will be decided by the market," Garg said.

PFC identifies itself as a "developmental financial institution" for the power sector.

It is a key player in the ambitious plan to set up seven ultra mega power projects across the country having the capacity to generate 4,000 mw each, having set up the special purpose vehicles floated to pilot these projects.

It has, however, not made any funding commitment to these projects. "They will be appraised, as any other loan proposal, to decide on exposure," Garg said.

Two proposals for ultra mega power plants "" at Sasan (Madhya Pradesh) and Mundra (Gujarat) "" are weeks away from award to successful bidders.