Stock Shastra

Power Finance Corporation (PFC), a Nav Ratna PSU, specializes in financing power projects and is known to be the ‘Financial Backbone of the Power Sector’. It came out with its Initial Public Offer in 2007 and since then has reported robust growth in its financials. The company has now come out with a Follow-on Public Offer which will enable it to raise close to Rs. 3500 Cr. from the sale of fresh equity while the Government will raise close to Rs. 1100 Cr. from the sale of part of its stake in the company. The price band for this follow-on public offering has been fixed at Rs. 193 – 203.

PFC was recently classified as an Infrastructure Finance Company which gives it an operational edge over its competitors. While this augurs well for the company, certain concerns like rising interest rates and a concentrated loan book, yet remain.

So, considering these factors, does this ‘Financial backbone of the Power Sector’ provide a good investment opportunity?

After the disinvestment done by the Government through IPOs of Coal India and MOIL and the FPO of Shipping Corporation of India, its time for the private sector to raise funds from the primary markets. Tata Steel Ltd. one of India’s largest steel producer, is coming out with an FPO to raise around Rs. 3500 Cr. A global major, Tata Steel is also the 7th largest steel producer in the world.

The price band for this follow-on public offering has been fixed at Rs. 594- Rs. 610.

So, what should be your action on the Tata Steel FPO?

Aiming to raise approximately Rs 40,000 crore through disinvestment this fiscal, the government has been divesting its stakes in PSUs through IPOs and FPOs. This The Shipping Corporation of India’s FPO is another such divestment for the same. Incorporated in 1950, Shipping Corporation of India Ltd (SCI), a Navaratna PSU, is India’s largest shipping company, operating in cargo passenger-cum-cargo and tanker services.
The price band for the initial public offering has been fixed at Rs. 135- Rs. 140. A further discount of 5% on the final issue price will be given to retail investors and SCI’s employees.
So, what should be your action on the SCI FPO?

After the huge success of Coal India Ltd.’s IPO, the Government of India has put up another offer in the stock market. This time it has come up with a Follow-On Public Offer (FPO) of another Navratna company Power Grid Corporation of India Ltd. (PGCIL) which made a phenomenal debut in the capital market 3 years back. The price band for the follow-on public offering has been fixed at Rs. 85-Rs. 90. A further discount of 5% on the final issue price will be given to retail investors and Power Grid’s employees.

PGCIL is one of the largest transmission utilities in the world. It is responsible for planning, executing, owning, operating and maintaining the high voltage transmission systems in the country. Its core operational area includes development of inter-state transmission systems and grid management.

So, can the Power Grid FPO power your portfolio?