Mumbai: In the biggest-ever reaction to a public stock bidding, the state-owned Power Grid Corporation of India (PGCIL ) has got subscription of Rs 1,90,000 crore, a slice of which came from provident and retirement funds capitalists who infrequently insert money into equity.

The company will raise about Rs 2,985 crore through the IPO that has been oversubscribed 65 times. Capitalists were offered a price band of Rs 44 to 52 for building the book.

A few of the retirement funds, which have insert subscriptions, are employee funds of Canara Bank, Oriental Bank and various state electricity board funds.

Whereas PFs are still awaiting the labour ministry’s authorization to invest in stocks, bank provident funds that are not directly under the department, can invest in equity. However, other retirements funds such as supperannuation (SA) and gratuity funds of all organizations are free to invest in stocks in the allowable edge of 5% of fresh inflow.

Power Grid manages the transmission of as much as 45% of the power generated in India, making it the biggest player in the segment.

The lead managers to the IPO are Kotak Mahindra Capital, Citigroup and Enam Securities. “The quality of paper coming out of PSUs is getting more investors . This augurs well for the government in its selective disinvestment programme and from future IPOs by PSUs,” said Kotak Securities vice-president (research) Ketan Karani.

PGCIL received bids for 3,700.54 crore shares against 57.39 crore shares on offer. The QIB part of the issue solely is said to have been subscribed about 115 times that   computes to Rs 1.64 lakh crore.

The sources said that out of this 41 per cent was gathered by Enam Securities, 30% by Citigroup and 28-odd % by Kotak Mahindra Capital. Retail is said to have been subscribed more than five times whereas the HNI portion was subscribed about 41 times.

Dharmesh Mehta, Enam Securities head of broking said, “This goes to reiterate the investor confidence in the Indian power sector story.”

The majority of brokerage houses in their reports have suggested clients to subscribe to the issue. They have underlined elements including high revenue visibility, significant ramp up in transmission capacity, superior design and engineering capabilities and low operational risks, among others. Incidentally, a few of the brokerages have proposed customers to subscribe at the higher end of the price band.

The ASK Securities report stated, “With an EPS of Rs 2.9 for FY07, it is priced at a PE of 17.9 times on the higher end of the price band and 15.2 times at the lower end of the price band. We recommend investors subscribe at the higher end of the band (Rs 52).”

India Infoline has notified capitalists to subscribe with a yearly prospect.

“The government’s plans to increase capacity on the generation side will definitely trigger a huge demand for transmission. Coupled with this, PGCIL’s Rs 12,700-crore capacity addition plans over the next couple of years provide visibility for revenues going forward, ” it added.