New Delhi : Riding on strong demand from retail and institutional buyers, the government’s 5 % stake sale in Power Finance Corp Ltd was lapped up by investors, fetching about Rs 1,600 crore to the exchequer.
Despite a steep decline in broader markets, the offer for sale (OFS) for 6.60 crore Power Finance Corp (PFC) shares received bids for 15.42 crore shares worth Rs 3,747 crore. The OFS finally got subscribed 2.34 times, making it the second successful disinvestment of current fiscal.
“Today Nifty showed its steepest fall since 2011 and there was an Asian market collapse and China market too collapsed considerably… Despite that we managed to have a successful offering. We got bids worth Rs 3,747 crore,” Disinvestment Secretary Aradhana Johri said. Although Johri did not give an exact amount that would come to the exchequer, she said: “I do not visualise anything very different from what we indicated earlier”.
The sale saw robust demand from retail buyers with bids coming in for 5.92 crore shares, as against 1.32 crore reserved for them. The floor price of Rs 254 a share was at a discount of 2.14 % over Friday’s closing price of Rs 259.55.
Shares of PFC closed at Rs 254.05, down 2.12 % over previous close, tracking the broader benchmark Sensex which fell nearly 2 %.
PFC is the second PSU to be divested in the current fiscal under the government’s disinvestment programme. In April, the government had sold 5 % stake in REC for Rs 1,550 crore.
Of the Rs 3,747 crore worth bids received, Johri said, Rs 2,414 crore has come from institutional buyers, while Rs 1,510 crore from retail bidders.
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.
Johri said the Disinvestment Department’s contention that retail investors do not need two trading days of advance notice to invest in PSU disinvestment stands vindicated as retail investors’ portion in PFC OFS has been over-subscribed 4.5 times.