Mumbai: In an initial public offering (IPO) of 573.9 million shares, State-run Power Grid Corporation of India Ltd (PGCIL) will raise up to Rs 2,984 crore. The proposal, which is set to open on 10 September and close on 13 September, will be priced between Rs 44 and Rs 52 a share.

Two other Union government-owned power companies National Hydroelectric Power Corp. and Rural Electrification Corp. (REC), are also projected to move into the capital markets in the recent year (2007).

REC has already made a filing with the market watchdog for an issue of Rs1,200 crore. Earlier this year, Power Finance Corp. had brought up about Rs 1,000 cr from the securities market. PGCIL’s is the third major public issue to knock the market after Delhi-based realty business company DLF Ltd’s Rs 9,162 crore issue and ICICI Bank’s Rs9,000 crore issue.

The issue consists of a new offer of up to 382.6 million shares or 10% fresh equity and 5% stake sale of 191.3 million shares by the administration. After the issue, the Union government’s stake in the company will come down to 86.36% from 100%. The company will keep Rs Rs1,683-1,989 crore from the earnings, whereas the government will receive Rs841-994 crore.

Power Grid also plans to make use of the capital to fund 15 transmission projects worth Rs1,270.75 crore, in which, it has already spent about Rs 5,862.8 crore on these projects.

J. Sridharan, Director Finance, PGCIL said approximately 90% of its issue earnings are expected to be utilized to fund the projects. The company also has an unused foreign currency debt pipeline of Rs2,358 crore, a few of which will be utilized to fund other projects in the 11th Plan (2007-12). Presently, PGCIL possesses and functions 61,875km of transmitting lines and channels about 45% of the power generated in the country.

While addressing a press meet where the issue was declared, Anil Razdan, Union power secretary stated that the power ministry is starting various monitoring mechanisms to make sure that its 11th plan aims for generation and transmission capabilities are fulfilled. These comprise the National Power Management Board to manage the execution of capacity addition programs of state-owned power companies.

Mr. Razdan added that a group of union and state ministers led by Union power minister Sushil Kumar Shinde has also been set up to keep an eye on progress of these projects.