PowerGrid plans to raise Rs 3k cr via fresh issue

India’s largest power distributor Power Grid Corporation of India plans to raise up to Rs 3,000 crore by issuing fresh shares by year-end, at a time when most companies dread the stock market. “We will approach the government for our second tranche of public offer by the end of this year or the beginning of next year,” PowerGrid chairman and managing director SK Chaturvedi said. PowerGrid’s confidence to approach the choppy market probably stems from the 78% return on its stock since the lows of October last — the third-highest gains on the Nifty — as well as its successful bond issues worth Rs 1,000 crore each in February and March. While the first float offering 9.6% interest received applications for Rs 2,600 crore, the second one offered 9.2% interest and received Rs 2,500 crore. PowerGrid will use the money raised from the follow-on public offer for strengthening its systems, evacuating more power from different parts of the country and entering consultancy business in a big way. So far, PowerGrid has executed small-ticket consultancy projects in Southeast Asia, but it is now eyeing the big league. The company is in advanced talks with firms in the US and central Asia for high-end consultancy projects. The company is hoping for a rerun of its successful initial public offer (IPO) in October 2007, when it raised close to Rs 3,000 crore. Considering the big investment in the power sector with a number of ultra-mega power projects coming up in the country and PowerGrid’s virtual monopoly in power distribution, the public offer is expected to attract an overwhelming response from investors.