PFC stake sale fully subscribed, govt may get Rs 1,600 cr

New Delhi: The government’s 5 percent stake sale today in power sector lender PFC got fully subscribed with strong demand coming in from institutional investors. However, retail demand was tepid with the portion reserved for them getting subscribed 43 percent so far.[caption id=“attachment_2365284” align=“alignleft” width=“380”]  The PFC logo. Image courtesy PFC[/caption] PFC is the second public sector enterprise to be divested in the current fiscal under the government’s disinvestment programme. In April, government had sold 5 percent stake in REC for Rs 1,550 crore. The share sale, which began at 0915 hours, received good response from institutional investors and portion reserved for them was subscribed 1.34 times by 1135 hours. The portion reserved for the retail investors, who are also getting 5 percent price discount, was subscribed 43 percent, as per the stock exchange data. Overall, the offer was subscribed 1.16 times and the subscription may rise further during the day as bidding will continue till 1530 hours. With the successful sale of 6.60 crore shares in Power Finance Corp (PFC) through a one-day OFS route at a floor price of Rs 254 apiece, the government may get over Rs 1,600 crore. The floor price of Rs 254 a share was at a discount of 2.14 per cent over Friday’s closing price of Rs 259.55. At present, government holds 72.80 percent equity in Power Finance Corporation. After sale of 6.60 crore shares representing 5 percent stake on offer, government’s holding will be reduced to 67.80 percent. PFC is the first disinvestment under the modified OFS rules of Sebi under which companies are allowed to disclose stake sale plans two ‘banking’ days ahead of the issue. The Department of Disinvestment had approached Sebi in March saying they do not want trading days in-between the announcement and stake sale. Earlier, the companies were required to give an advance notice of two trading days before the OFS, which the government says gave scope for speculators to beat down the share price of the disinvestment-bound public sector enterprise. The Department has a Rs 69,500-crore target from PSU disinvestment in the current fiscal, of which Rs 41,000 crore would come from minority stake sale and Rs 28,500 crore from strategic stake sale. As much as 20 percent of the issue size is reserved for retail investors and 25 percent for mutual funds and domestic insurance companies. The remaining portion is left for institutional investors, which are usually lapped up mostly by domestic financial institutions and foreign funds. PTI