PFC board approves final papers for FPO

Power Finance Corporation (PFC) today said its board has approved the final papers for coming out with a follow on public offer (FPO).

"The board of directors of the company at its meeting on April 24 have approved the Red Herring Prospectus (RHP) in respect of the proposed further public offer," PFC said in a filing to the Bombay Stock Exchange.

The company plans to come out with an FPO of 22.95 crore shares, comprising a fresh issue of 17.21 crore equities and an offer for sale of 5.73 crore shares.

PFC, which finance infrastructure projects within the country, had last month filed draft prospectus with the capital market regulator Sebi. According to sources, the Rs 6,000-crore FPO of the Navratna PSU is expected to open on May 10 and close on May 13.

BofA Merrill Lynch, Goldman Sachs, JM Financial are among the five investment bankers managing the PFC issue.

The government currently holds a 89.78 per cent stake in the firm. It had divested a 10 per cent stake through an initial public offer (IPO) in 2007.

In February, the Cabinet Committee on Economic Affairs gave its nod to the company to hit the market. The company will infuse 15 per cent fresh equity, while the government will dilute its 5 per cent stake.

PFC, which listed itself on the stock exchanges in March 2007, saw its market capitalisation almost doubling to Rs 25,440 crore, from Rs 12,803 crore at the end of March 21, 2011.

Last year, PFC was accorded the infrastructure finance company status, which will enable the company to raise funds through issue of tax-free infrastructure bonds.