IPO Update: Power Grid Corp. of India Ltd.

Power Grid to Transmit Listing Gains, Get Electrified

Powergrid Corporation has entered the capital markets with a public offer of 57.39 Crore equity shares at a price band of Rs. 44-52. The company intends to raise about Rs. 3000 crore at the higher band. Investment Guru is of the view that the company has good growth potential given the thrust on power sector reforms and its importance in the growth of the economy. The issue is priced reasonably and offers scope for listing gains.

Hightlights of the IPO :

  • Power Grid is into the business of Power transmission. (In Year 2007, it transmitted approximately 298 billion units of electricity, representing nearly 45% of all the power generated in India)

  • The company has completed 101 transmission projects and schemes valued at Rs. 251.81 billion. As at June 30, 2007, it had 45 transmission projects in various stages of implementation.

  • The Company plan to spend Rs. 550 billion towards investment in transmission projects during the GoI’s Eleventh Five Year Plan

  • The company also provides transmission related consultancy services.

  • The company has also diversified into Telecom Business by creating a telecommunications network principally using its overhead transmission infrastructure.

  • It own and operate a fibre-optic cable network over 19,000 kilometres long and connected over 60 Indian cities, including all major metropolitan areas. The company has been leasing bandwidth on this network to more than 60 customers, including major telecom operators such as BSNL,VSNL, TTSL RCOM and Bharti.

  • The net proceeds of the Fresh Issue shall be utilized for 15 identified transmission projects of the Company

  • The company's Topline has grown at a CAGR of 13% over the last 5 years. For FY07, PGCIL clocked a Topline of Rs. 40.8 Billion and PAT of 10.8 billion. For the Q1 ended June,30 the Topline was Rs. 10.5 Billion and a PAT of Rs. 4.5 Billion backed by savings in Interest and Finance Charges.

  • Weighted average EPS for the last three years stood at Rs.2.85. The annualised EPS based on first quarter's EPS comes to Rs. 4.76

  • The retrun on Networth comes to 10.16 %

  • Net Asset value of company's share comes to Rs. 29.18 per share.

  • There are no listed peers per the prospectus.

  • Major part of the Revenues is derived from the transmission of power to the State Power Utilities and many of these entities have had weak credit histories in the past. This may impact performance of PGCIL.

Issue Opens : September 10th, 2007

Issue Closes : September 13th, 2007

Registrar : Karvy Computer Share

Company Website : Click Here

Check Allotment Status of Power grid IPO Here


Anonymous said...

Hi Rajesh

What are the chances of allotment in power grid IPO ?


Anonymous said...

Dear Sir,

any idea of allotment date for power grid ipo. also what is the expected listing price given the huge response