Power Grid FPO sold out on Day I

The Rs 7,028-7,442 crore follow-on public offer (FPO) of state-run Power Grid Corporation of India was sold out on Tuesday,Day One of the issue,with institutions bidding for the shares. The issue was subscribed 1.08 times,according to the National Stock Exchange (NSE) website though the retail and the HNI quotas saw less than 10 per cent subscription.

This is the best response any FPO has received on the first day in this calendar year. The REC FPO had received 29 per cent subscription on Day One,while NTPC was subscribed to the extent of 77 per cent and NMDC received was subscribed by 17 per cent. Engineers India didn’t receive too much of a response on the first day. “The response received on the first day is an indication that the issue will do well,” said S Vishvanathan,MD and CEO,SBI Capital Markets.

The price of the Power Grid stock,after declining about 4 per cent on Monday,gained 5 per cent on Tuesday to close at Rs 103.25 on the NSE. Interestingly,the counter clocked huge volumes around of 21 million shares (55 per cent of which was market for delivery) compared with the daily average volume of 2.6 million seen in the past one month.

New shares are being offered in the range of Rs 85-90 apiece. The over 841.7 million share offering received bids for over 905 million shares,5.5 million of which came in at the cut-off price at which the shares will finally be allotted. The QIBs category,which comprises FIIs,MFs and insurance companies,was subscribed 2.09 times,receiving over 875 million bids.