Power Grid Corporation’s FPO @ Rs. 85-90 – December 2013

by Shiv Kukreja on December 3, 2013

in IPO/NFO

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

Power Grid Corporation of India Limited (PGCIL), a ‘Navratna’ company and the Central Transmission Utility (CTU) of the country, is coming out with its second follow-on public offer (FPO). The issue will open for subscription today, December 3 and will get closed for the institutional investors on December 5 and for all other investors, including the retail investors and its employees on December 6.

Price Band & 5% Discount – The company has set the price band between Rs. 85 to Rs. 90 and has also decided to offer a 5% discount to the retail investors and the employees of the company. If the price gets fixed at Rs. 90, the retail investors will get the shares at Rs. 85.50 per share.

Lot Size, Minimum & Maximum Investment – With a lot size of 150 shares and the offer price of Rs. 85.50 per share, minimum investment required stands at Rs. 12,825. A retail investor may apply for a maximum of 2,250 shares in the offer i.e. a maximum investment of Rs. 1,92,375.

Shares on Offer – The company is going to issue about 78.71 crore shares in the offer, constituting 17% of the company’s existing paid up capital. This comprises a fresh issue of 60.19 crore shares and simultaneous disinvestment of 18.52 crore shares by the Government of India. After the stake sale, the Government’s holding in PowerGrid will come down to 57.89% from the current 69.42%.

35% Issue Reserved for Retail Investors – There are three categories of investors – Qualified Institutional Bidders (QIBs), Non-Institutional Bidders (NIBs) and the retail investors. 50% of the issue is reserved for the QIBs, 15% for the NIBs and the remaining 35% for the retail investors. 30 lakh shares have been reserved for the employees of the company.

Historical Price Movement – Power Grid launched its IPO in October 2007 and its first FPO in November 2010. Price band set for the current FPO is absolutely same as it was offered in its first FPO. Since then, its price has been moving in a limited range, touching a high of Rs. 124.70 and a low of Rs. 86.55.

But, during most of this time period, it has remained in a very tight price range of Rs. 95 to Rs. 115. During the same time, the fundamentals of the company never deteriorated, as it has been the case with many other public sector enterprises.

This FPO has been an overhang on the company’s price movement in the recent past. Despite a good performance and improved profitability shown by the company, its price has fallen from Rs. 110-115 to Rs. 93-98 in the last few months.

The company is to invest Rs. 30,000 crore in the 12th Plan and this FPO would help the company to partially fund its ongoing projects.

Power Grid is a defensive stock to buy in the power sector with extremely attractive valuations. Net Profit of the company grew at 22% compounded annually between financial years 2007-08 and 2012-13. At the current price of Rs 93.60, the stock trades at 10.05 times its trailing twelve months earnings per share and 1.64 times its book value.

I think the offer price of the company in the FPO @ Rs. 85.50 is extremely attractive and has the potential to provide around 30-50% returns in the next one to two years time frame. Personally, I’ll subscribe to the issue and advise my clients as well to invest in this offer.

{ 106 comments… read them below or add one }

santonu December 3, 2013 at 7:50 AM

The issue seems to be fully subscribed as valuation is attractive. Main problem of FPO is that experienced traders short sell his allotment just before entering into his DEMAT which may drag the stock price and recovery usually takes time.

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Shiv Kukreja December 3, 2013 at 11:22 AM

Hi Santonu,

Sometimes over-smartness also backfires. Power Grid’s valuations are attractive and it is ripe for a good jump post this FPO. Short selling is not advisable in this counter, if people are doing it with derivatives, it might result in a loss for them. Over-supply of shares post this FPO is the only concern area for me.

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santonu December 3, 2013 at 12:43 PM

Sir your suggestion is appreciated. Even i was benifited by shortselling in cash market not in derivative in earlier FPOs like Tata Steel,PFC,Power Grid ,NMDC. This is the way as follows

1. I know how much allotment is made to me by getting the bank statement before demat entry. Let the day be Monday and share that will be alloted is 100
2. I make an assumption DMAT entry will be by thursday
3. I short sell 100 share in cash market on tuesday and i will get two day time for settlement.

4. I can beifit a lot as stock price in this period is always in down trend if DMAT entry is made really on thursday
5. If demat entry is delayed and stock makes a upward trend , then there will be a great loss as my short sell shares will be auctioned
6. Game i very risky if your assumption on demat entry date proves wrong

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Shiv Kukreja December 3, 2013 at 4:08 PM

I understand this method Santonu, but I don’t think there is a huge scope of sure shot gain. This arbitrage transaction gives you gain when there is huge demand for the stock and it might result in a very muted gains if there is huge selling post listing or there is a lack of demand.

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ketki December 3, 2013 at 8:59 AM

Any opinion on “L & T Finance Holding Ltd – Preference Shares” which is closing today ?

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Shiv Kukreja December 3, 2013 at 11:25 AM

Hi Ketki,

I’m not aware of any such issue. Can you please share its link here?

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ketki December 3, 2013 at 12:17 PM

http://content.icicidirect.com/Mailimages/LT_Finance_Pref_Product_Note.pdf
http://content.icicidirect.com/Mailimages/LT_Pref_IM.pdf

It is 5 year compulsory redeemable preferred stock of L&T finance paying 9% dividend yearly. minimum investment is 10L (offered by icici direct)

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Shiv Kukreja December 3, 2013 at 2:11 PM

Hi Ketki,

It is on a private placement basis. Issue opened on October 11th and got closed on the same day itself. Now, ICICI Securities is offering these preference shares to its clients directly in a resale transaction.

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Simple December 3, 2013 at 2:45 PM

Hi Shiv!

I am applying for 2250 shares. Can you please tell me what I should fill under these columns in the FPO form:-

1. Bid Price
2. Discount, if any
3. Net Price
4. Cut-Off

According to me, these should be the answers- 90, 4.50, 85.50, tick mark

Am I right?

Also, under the net price column, how do i enter 85.50? Only 4 boxes are provided.

I am sorry for asking such childish questions, but I am very confused

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Shiv Kukreja December 3, 2013 at 6:41 PM

Hi Simple,

For retail investors, it is always advisable to just tick the “Cut-Off” box and leave the rest boxes blank. Whatever price the company finally decides to issue shares at, the retail investor will get the shares at that price.

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Simple December 3, 2013 at 10:27 PM

But if I leave the Bid Price column blank, wont my application get rejected? Also, if my broker wrongly enters the bid price at a value different than the one fixed by the company, wont my application get rejected?

And if i enter the bid price as 90 (the upper band of the price), wont I automatically be allotted shares even if the price is fixed at the lower band or somewhere in between?

On the NSE website, discount has been mentioned as 4.5

Please advise on the same.

Also I have heard that any application by Retail above 1 lac rupees gets reported to the Income Tax Dept. Is it true?

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Shiv Kukreja December 4, 2013 at 12:11 AM

1. If you leave the Bid Price column blank & tick the “Cut-Off” box, your application won’t get rejected.
2. If your broker wrongly enters the bid price at a value different than the one fixed by the company and if the price entered is lower, your application will get rejected. It is better to write “N.A.” in the “Bid Price” column & the “Net Price” column.
3. If you enter the bid price as Rs. 90 and if the price is fixed at the lower band or somewhere in between, then you’ll be allotted the shares at Rs. 90 less retail discount.
4. If you invest Rs. 1 lakh in stocks or ETFs in a year (not only IPOs/FPOs), it gets reported to the I-T department.

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Simple December 4, 2013 at 12:21 AM

Thank You very much Shiv!!! 🙂

No one was able to give me a precise answer to these questions. Thank you so much once again.

Still feeling very apprehensive about writing “NA” under ‘Bid Price’ & ‘Net Price’ columns (since I have never done it before), but will take your advice, trust you and do the same

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Shiv Kukreja December 4, 2013 at 12:55 AM

You are welcome Simple and thanks for your trust !! 🙂

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ketki December 3, 2013 at 2:51 PM

Thank you Shiv for clarifying !

An article here for those looking into investing in powergrid FPO in today’s ET.

http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/psu-stocks-near-52-week-low-as-pgcil-fpo-opens/articleshow/26757642.cms

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Shiv Kukreja December 3, 2013 at 6:42 PM

You are welcome Ketki !!

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Simple December 3, 2013 at 3:08 PM

Why was my comment deleted?

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Shiv Kukreja December 3, 2013 at 6:43 PM

Which comment has got deleted Simple ? One of your comment is there above.

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Simple December 3, 2013 at 10:29 PM

sorry Shiv. The comment is there above. For a few minutes, it wasn’t being displayed, so I thought it was deleted.

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Shiv Kukreja December 4, 2013 at 12:13 AM

Sure, no issues.

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Aditya December 3, 2013 at 3:33 PM

Can you tell what is meant by “cut-off”?

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Shiv Kukreja December 3, 2013 at 6:55 PM

Cut-Off price is the price at which the board of the company decides to finally issue its shares after the IPO/FPO gets closed. This price can be any price – floor price, upper band price or a price between these two prices. In Power Grid’s case, most likely it would be set at Rs. 90 per share.

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santonu December 3, 2013 at 4:52 PM

sir can you tell whether this issue is under safety net mechanisim as i has not so far gone through RHP

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Shiv Kukreja December 3, 2013 at 7:04 PM

No Santonu, there is no Safety Net arrangement in Power Grid’s case.

“Our Promoter, our Company, our Directors and the BRLMs have not entered into any buy-back or standby arrangements or any safety net arrangements for purchase of Equity Shares from any person.”

Source: http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/Investors/fpo/Red_Herring_Prospectus.pdf

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Simple December 4, 2013 at 4:11 AM

Hi Shiv!

Sorry to bother you again, but I am still a bit confused.

When I am applying for 2250 shares, I have to write a check for 1,92,375 (as also mentioned by you above). Isn’t this price calculated on the basis of 85.50/share after factoring in a discount of 4.50/-.

So doesn’t this automatically imply that my bid price is 90 and net price is 85.50? So isn’t it a bit redundant to write NA under these columns?

Now lets assume the price is fixed at 83 (after factoring in a 4.50/- discount), wont I still be allotted shares at my original net price of 85.50 as also mentioned by you in your reply to my previous query (point 3 in your previous answer)

Would be extremely grateful to you if you would kindly clarify and banish all my doubts once and for all

Thanks in advance

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Shiv Kukreja December 4, 2013 at 10:21 AM

Hi Simple,

If you apply for these shares by selecting “Cut-Off”, then you’ll be allotted shares at a price which is set by the board of the company after the issue gets closed, be it Rs. 90 per share or Rs. 88 per share or Rs. 85 per share or any other price. You’ll also get 5% discount on the price being set.

When you apply for these shares, it is mandatory to do your cheque calculation considering the “Cap Price” of the issue. Here is the extract from the prospectus:

“Retail Individual Investors and Eligible Employees bidding in the Employee Reservation Portion bidding at the Cut-Off Price have to ensure payment at the Cap Price, less Retail Discount or Employee Discount, as applicable, at the time of making a Bid.”

When you are applying for it at the “Cut-Off” price , you are not ‘bidding’ for the price. You need to leave the “Bid Price” and “Net Price” as blank or write NA in those boxes.

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Simple December 4, 2013 at 10:53 AM

Hi Shiv!

Thank you for your reply. My broker today morning refused to accept my application since I wrote “NA” under the 2 columns as advised by you. He challenged me that no broker would accept my application anywhere in the city and told me to again fill the entire form and mention the bid price as 90, net price as 85.5 and also tick the cut off column.

I have decided not to apply for the issue altogether since there is so much confusion and a high chance of my application getting rejected. I will probably invest in HUDCO where I am assured to make a guaranteed return

Sorry for having wasted your time

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ketki December 4, 2013 at 11:21 AM

I checked with my broker. If you check CUTOFF box, their online application automatically fills in price of 90. BUT this does not mean you will get it at 90. It will be assigned at whatever price the FPO comes out finally. so after bidding wars if the price is set at 87 , you will get it at 87 EVEN though you put 90 in the application, by virtue of you checking CUT OFF. if you do not check CUT OFF, then you are actually bidding and naming your price. I hope this clears your doubt. The online application does not allow NA in price box for me either (with CUTOFF checked)

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Shiv Kukreja December 4, 2013 at 11:36 AM

Absolutely Correct !! This is how it happens in the online process.

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Simple December 4, 2013 at 7:38 PM

Thank You Ketki for your guidance and concern in the matter :-). I have submitted my application. Hope to get full allotment

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Shiv Kukreja December 4, 2013 at 11:26 AM

Hi Simple,

Though my logic is correct, just follow your broker & write Rs. 90 as the “Bid Price”, Rs. 4.50 as the discount and Rs. 85.50 as the “Net Price” and ensure that the “Cut-Off” box is ticked.

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Simple December 4, 2013 at 7:36 PM

Took your advice and re-submitted my application.
Thanks!

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Shiv Kukreja December 4, 2013 at 11:28 PM

That’s Great !!

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Aditya December 4, 2013 at 7:55 AM

The article below clearly states that the maximum nos of shares which a retail investor can apply for is 2100, but you have mentioned above in your post that it is 2250. Please explain the discrepancy. It should be 2100 only since 2100*90=1,89,000/-. & 2250*90=2,02,500/-.

You seem to have based your calculations to calculate the nos of shares which can be applied for after factoring in a discount of 4.50/- which is clearly wrong.

I have spoken to 2 brokers who are handling this issue & according to them too, it should be 2100 and not 2250.

http://www.business-standard.com/article/markets/powergrid-issue-charges-up-grey-market-113120300847_1.html

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Shiv Kukreja December 4, 2013 at 10:26 AM

All these brokers and the correspondents are just not doing their basic research before writing or opening their mouth. Please check the below pasted link and click on the “Issue Details”.

http://puneinvest.com/fpo-power-grid-issue-dec-2013/

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Sanjay December 4, 2013 at 12:09 PM

Hi Adiya,

Just FYI, I applied for this via my HDFC Securities account. I selected the ASBA Retail option and I marked cut-off price which showed as Rs. 90 and I marked maximum shares under this category which came to 2,250 shares (yes, 2250*90 does not equate to less than Rs. 2,00,000).

When I got my eIPO confirmation in the evening it showed an amount of Rs. 1,92,375, 2,250 shares and the bid price at Rs. 90 (though they have charged me Rs. 85.50).

Therefore, it is 2,250 shares as rightly mentioned by Shiv.

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ghghg December 4, 2013 at 1:18 PM

Read Mr. Tulsian’s website. He clearly states the nos of shares is 2100 and not 2250

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Shiv Kukreja December 4, 2013 at 1:47 PM

Then how the HDFC Securities’ portal is allowing retail investors to bid for 2,250 shares ?? It is 2,250 for sure, whatever others are saying it is irrelevant for the investors.

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dfdb December 4, 2013 at 7:59 AM

The article below clearly states that the maximum nos of shares which a retail investor can apply for is 2100, but you have mentioned above in your post that it is 2250. Please explain the discrepancy. It should be 2100 only since 2100*90=1,89,000/-. & 2250*90=2,02,500/-.

You seem to have based your calculations to calculate the nos of shares which can be applied for after factoring in a discount of 4.50/- which is clearly wrong.

I have spoken to 2 brokers who are handling this issue & according to them too, it should be 2100 and not 2250.

http://www.business-standard.com/article/markets/powergrid-issue-charges-up-grey-market-113120300847_1.html

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Shiv Kukreja December 4, 2013 at 2:50 PM

Day 1 (December 3) subscription figures:

Category I – 53.49 crore shares as against 39.20 crore shares reserved – 1.36 times subscribed
Category II – 47,250 shares as against 11.76 crore shares reserved – 0.00 times subscribed
Category III – 0.87 crore shares as against 27.44 crore shares reserved – 0.03 times subscribed
Category IV – Rs. 48,000 as against 30 lakh shares reserved – 0.02 times subscribed
Total Subscription – 54.32 crore shares as against 78.71 crore shares on offer – 0.69 times subscribed

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Jagapathi Reddy December 4, 2013 at 3:00 PM

Can someone give the site from where I can apply online for Powergrid FPO. Thank you.

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Shiv Kukreja December 4, 2013 at 4:57 PM

To apply for Power Grid shares, you need to compulsorily have a Demat A/c. If you have it, then you can apply for it online from your trading A/c. Otherewise it is not possible to apply for it online.

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Vivek December 4, 2013 at 7:32 PM

As per the “All Exchanges Demand graph” on the NSE, most of the bids have come in at 85. Does this graph include the retail bids at 90 (since the net price is 85.5), or are the retail bids shown under 90 rupees?

http://www.nseindia.com/products/content/equities/ipos/ipo_current_pwrgrid.htm

Also can you share the latest & cumulative subscription figures of day 2 especially for Category 4

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Shiv Kukreja December 4, 2013 at 11:09 PM

Hi Vivek,

Retail Investors have applied for 4,32,62,100 Power Grid shares so far, out of which 3,87,56,400 have been applied at the “Cut-Off” price and rest 45,05,700 are “Price Bids”.

3,87,56,400 + 3,73,950 (shares applied by Power Grid employees at “Cut-Off”) = 3,91,30,350

Seventh Tower of the “All Exchanges Demand graph” showing 391.303 lakh shares indicates this figure of 3,91,30,350.

http://www.nseindia.com/products/content/equities/ipos/ipo_current_pwrgrid.htm

http://www.nseindia.com/marketinfo/ipochart/ipochart.jsp?issue=PWRGRIDCUMUEQ&ir=I&cn=C&sd=D&cnlink=N

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Uday December 4, 2013 at 10:48 PM

Hi,

I am having ICICIDirect account. How can i purchase a lot(150 shares)? If i try to buy it now, i have to purchase at market price or is it at discounted price as described above (85.5)?

Please help.

Thanks,
Uday

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Shiv Kukreja December 4, 2013 at 11:26 PM

Hi Uday,

Just log in to your ICICI Direct online A/c., visit the IPO section. The FPO is still open and you can apply for Power Grid shares at Rs. 85.50 (Rs. 90 – Discount of Rs. 4.50).

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Uday December 5, 2013 at 8:51 AM

Thanks for your inputs Shiv.

As it is oversubscribed, can i buy now? If i buy, is it based on Lottery or guaranteed allotment of shares?

Thanks,
Uday

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Shiv Kukreja December 5, 2013 at 10:14 AM

Hi Uday,

Yes, you can still subscribe for it. Though the Retail Category portion is still unsubscribed, but the basis of allotment process is different with IPOs/FPOs. It is not on a “First Come First Served” basis.

Here you have the link to check the new Allotment Process:
http://www.onemint.com/2012/12/26/new-basis-of-allotment-explained-with-care-ipo/

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Uday December 5, 2013 at 12:13 PM

One last query shiv,

Can i put a bid price band in between(85-90) and get discount? Say if i bid at 87, will i get a discount(4.5/-) on 87/- =82.5/-?

If i place order at 87, will i get a guaranteed lot or is it based on lottery?

Or it is always better to place an order at 90 for guaranteed lot?

Please suggest.

Thanks,
Uday

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Shiv Kukreja December 5, 2013 at 8:31 PM

Hi Uday,

Discount for the retail investors is Rs. 4.50. If the issue price is fixed at Rs. 90 or any other price, you’ll get Rs. 4.50 as the discount. If you bid at Rs. 87 and the company fixes the issue price at Rs. 90, then you will not get any allotment.

Even if you bid at Rs. 90 and the issue gets oversubscribed multiple times, then also there is no guarantee that you’ll get allotment. There is a probability, albeit small, that you’ll not get allotment.

So, if you are sure about the prospects of the company or its post-listing price, it is always better to invest in IPOs/FPOs at the “Cut-Off” price.

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Shashwat December 6, 2013 at 6:58 PM

If the same allotment process is followed, everyone will get at least 1 lot right? I was about to apply for 2 lots but later applied for 1 lot only.

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Shiv Kukreja December 6, 2013 at 7:34 PM

Yes, I think so. I expect everyone to get at least 1 lot allotted. I was about to apply for 1 lot each in my family members A/cs., but then decided to apply for 2 lots each.

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Shiv Kukreja December 4, 2013 at 11:44 PM

Day 2 (December 4) subscription figures:

Category I – 78.95 crore shares as against 39.20 crore shares reserved – 2.01 times subscribed
Category II – 2,00,250 shares as against 11.76 crore shares reserved – 0.00 times subscribed
Category III – 4.33 crore shares as against 27.44 crore shares reserved – 0.16 times subscribed
Category IV – Rs. 4,98,000 as against 30 lakh shares reserved – 0.17 times subscribed
Total Subscription – 83.35 crore shares as against 78.71 crore shares on offer – 1.06 times subscribed

Huge investments will start pouring in from tomorrow. Just tighten your seat belts.

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Ansuman Agarwal December 5, 2013 at 6:22 AM

Great article,good job sir.

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Shiv Kukreja December 5, 2013 at 10:09 AM

Thanks a lot Ansuman !!

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Pratyush December 5, 2013 at 12:55 PM

Hi Shiv,

(I have poste this questions on your HUDCO tax free bond article as well. Sorry for being repeitive)

I have heard from people that one should invest in Bonds only with a sizeable investment amount like 4-5 Lakhs. Is it correct?
How much sense does it make for a small investor with investment amount of say 15000-20000 to invest in Bonds like HUDCO or NTPC? Would it be better to invest in Power Grid FPO with this much of investment amount?

This is kind of dilemma which I am sure many small investors with limited investable amount face always. Since for small investors its always a either-or situation between various investment options.

your take on this please.

Thanks,
Pratyush

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Shiv Kukreja December 5, 2013 at 8:33 PM

Hi Pratyush,

I’ve expressed my views there. I hope it satisfies you.

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vivek December 5, 2013 at 2:59 PM

Can you post the links to track the daily charts of both the 7.16% & the 8.83% G-sec yields

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Shiv Kukreja December 5, 2013 at 8:36 PM
Simple December 5, 2013 at 8:52 PM

Hi Shiv!

Who will get the HNI portion (subscribed only 12%) of the shares- retail, employees or
QIB’s (assuming the retail & employees portion exceeds 100% ). Also if the employee portion remains under subscribed, who will get their shares?

Any idea at what price maximum bids have come in and what is likely to be the cut off?

Also my browser is refusing to open the links posted by you above for the yields (reported attack site). Can you suggest alternate links for the same?

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Shiv Kukreja December 5, 2013 at 9:51 PM

Hi Simple,

Non-institutional investors’ portion is still open for subscription and I am quite confident that it will not remain under-subscribed. I think it should get more oversubscribed than the retail investors’ category.

As per the language of the prospectus – “Any unsubscribed portion in any reserved category shall be added to the Net Offer to the public.” and will be allotted “on a proportionate basis”.

Maximum bids have come in at Rs. 85 as of now, but I think it will be set at Rs. 90.

Here you have alternate links:

8.83% G-Sec – http://www.bloomberg.com/quote/GIND10YR:IND

7.16% G-Sec – http://www.investing.com/rates-bonds/india-10-year-bond-yield

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Simple December 5, 2013 at 10:49 PM

Thank you for your reply and for the links. Which is the benchmark yield as of now?

Looking forward to your analysis for this issue:
http://www.nseindia.com/products/content/equities/ipos/debt_ipo_current_iifclt3.htm

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Shiv Kukreja December 6, 2013 at 12:23 AM

You are welcome Simple !!

7.16% bond is the benchmark G-Sec as of now. I’ll cover the IIFCL issue in a day or two.

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debasis December 5, 2013 at 9:01 PM

Dear Shiv,

I applied for 1200 shares via my HDFC Securities account. I have put bid price as Rs. 90 but did not check the cut-off price box.

What could be the impact on allocation?

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Shiv Kukreja December 5, 2013 at 10:00 PM

Hi Debasis,

There will not be any impact on allocation. If the “Cut-Off” price is fixed at Rs. 90, you will be treated at par with other investors opting for “Cut-Off” option. If it is set below Rs. 90, then you’ll be allotted shares for sure, but at Rs. 90 less retail discount of Rs. 4.50. But, most likely, it will be fixed at Rs. 90. So, you should consider yourself to be a part of other investors.

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Shiv Kukreja December 5, 2013 at 10:14 PM

Day 3 (December 5) subscription figures:

Category I – 356.23 crore shares as against 39.20 crore shares reserved – 9.09 times subscribed
Category II – 1.44 crore shares as against 11.76 crore shares reserved – 0.12 times subscribed
Category III – 17.92 crore shares as against 27.44 crore shares reserved – 0.65 times subscribed
Category IV – Rs. 14.45 lakh shares as against 30 lakh shares reserved – 0.48 times subscribed
Total Subscription – 375.74 crore shares as against 78.71 crore shares on offer – 4.77 times subscribed

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Sagar Diwan December 6, 2013 at 7:35 PM

Hi Shiv,

Does this mean that retail investors would be allocated 100% of the applied shares ?

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Shiv Kukreja December 6, 2013 at 7:39 PM

Based on yesterday’s subscription figures Mr. Sagar ??

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Sagar Diwan December 6, 2013 at 8:09 PM

Sorry, slight date confusion on my part. I thought yesterday was last day for subscription and did not realize it was actually today. Will watch out for today’s subscription !! Hope retail quota is not over subscribed !

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Shiv Kukreja December 6, 2013 at 8:17 PM

Sure. It has got oversubscribed more than 2 times in the retail category. To what extent, it is yet to get finally updated.

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Hiren December 6, 2013 at 3:57 AM

Hi.

I want to know that which is the date of allotment of power grid fpo shares.

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Shiv Kukreja December 6, 2013 at 11:35 AM

Hi Hiren,

It is not yet finalised, but it is expected to get allotted on or around December 18th-19th.

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Hiren December 7, 2013 at 2:15 AM

Thanks Shiv for your reply,

I need one more favor from your side., i just want to know Recently i saw IIFL Home bonds issue is open on 12th December 2013 so it is safe to invest or not .

http://www.iiflfinance.com/IIFLHomeBonds.aspx

Thanks

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Shiv Kukreja December 7, 2013 at 5:39 PM

Hi Hiren,

I’ll cover the IIHFL NCD issue maximum by tomorrow.

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debasis December 6, 2013 at 11:11 AM

Can I apply through my HDFC securities account for second time?

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Shiv Kukreja December 6, 2013 at 11:35 AM

You can modify or cancel your bid.

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Sam December 6, 2013 at 11:47 AM

hi Shiv – if I apply for Powergrid FPO from 2 different trading accounts for full limit of 1.92 lakhs in each of them, will they check for duplicate applications… on PAN no or some other basis? Do I risk not getting any allotment for applying twice? I am sure people are applying from different accounts multiple times.. my question is is that really checked by the registrar while allocating shares?

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Shiv Kukreja December 6, 2013 at 12:39 PM

Hi Sam,

If you do that, your applications are liable to be rejected. These applications get tracked by the First/Sole applicant’s PAN number and multiple applications by the same applicant are liable to get rejected.

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SPPatel December 6, 2013 at 11:52 AM

Dear Shiv,

Can you tell me the allocation date of FPO. When it will be available to my account. And when i can do the buy/sell transaction. Actually i dont know much about FPOs. So i am asking these kind of question. Thanks in advance.

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Shiv Kukreja December 6, 2013 at 12:41 PM

Dear SPPatel,

I am doing a post on the same and you’ll get it posted here very soon.

Reply

debasis December 6, 2013 at 12:29 PM

Dear Shiv,

I could not cancel/modify my bid and it was confirmed by tele-executive of HDFC securities. As she says this is the norm for any FPO.

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Shiv Kukreja December 6, 2013 at 12:48 PM

Dear Debasis,

You can very well modify/cancel your online bid(s) for any/all of your IPO/FPO application(s). If the tele-executive says that you cannot modify or cancel your bid application, he/she is absolutely incorrect to state that.

It is possible that you’ve surpassed the time limit to modify the application. It is allowed till 1 p.m. with my Kotak Securities and Edelweiss Trading A/cs. Not sure about HDFC Securities.

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Viral December 6, 2013 at 6:16 PM

Respected Sir,

Can you tell me when will be the shares allotted and how much I will get ? I am a very small investor and have applied for 150 shares. Is it true that company is planning to distribute dividend in coming 1-2 months?

Thank You.

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Shiv Kukreja December 6, 2013 at 7:19 PM

Hi Viral,

The shares will get allotted within next 8-10 working days. I am not sure how many shares you’ll be allotted, but I hope you’ll get 150 shares allotted.

Power Grid is a dividend paying company and I expect it to pay Interim Dividend this year as well. Here you have the link to check its dividend paying history:

http://www.moneycontrol.com/company-facts/powergridcorporationindia/dividends/PGC

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Shiv Kukreja December 6, 2013 at 11:09 PM

Final Subscription Figures of Power Grid FPO on December 6:

Category I – 356.23 crore shares as against 39.20 crore shares reserved – 9.09 times subscribed
Category II – 114 crore shares as against 11.76 crore shares reserved – 9.70 times subscribed
Category III – 59.5 crore shares as against 27.44 crore shares reserved – 2.17 times subscribed
Category IV – Rs. 39.3 lakh shares as against 30 lakh shares reserved – 1.31 times subscribed
Total Subscription – 530.13 crore shares as against 78.71 crore shares on offer – 6.74 times subscribed

Approximate No. of Bids – 389,142

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Simple December 6, 2013 at 11:53 PM

Hi Shiv!

Retail subscribed @ 2.17 times. Any guesses about the cut off price?

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Shiv Kukreja December 7, 2013 at 12:32 AM

Hi Simple,

Issue price will be fixed by the Board of the company most likely on Saturday.

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Simple December 7, 2013 at 12:01 AM

Hi Shiv! I have a question about taxation.

I have 100 shares of power grid which I have been holding for 2 years. Lets assume I get allotted another 100 shares in this FPO.

Now I sell 100 shares of Power grid after 3 months and continue to hold the other 100. Will this be LTCG or STCG? If its STCG, will it be taxed @ 15% or as per applicable slab rate?

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Shiv Kukreja December 7, 2013 at 12:33 AM

Hi Simple,

I would not like to take such individual queries here on this forum.

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Simple December 7, 2013 at 1:10 AM

It was a hypothetical question, but ok. Np

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vivek December 8, 2013 at 3:21 PM

It will be LTCG Simple.

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santonu December 7, 2013 at 10:33 AM

Dear Sir can you expalin sale of stock of PGCIL is not done through offer for Sale window though i always prefer FPO

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Shiv Kukreja December 7, 2013 at 1:59 PM

I did not get what you want to say Santonu.

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santonu December 7, 2013 at 3:01 PM

Sir i want to know in which cases OFS(Offer for sale ) is applicable. Govt of India off loaded their stake in companies like hindustan copper(2 times),ONGC, SAIL etc through OFS window and why GOI had chosen FPO in powergrid for their stake sale

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Shiv Kukreja December 7, 2013 at 5:48 PM

Please check this post, I hope you’ll get the answer to your query:
http://www.onemint.com/2012/12/28/offer-for-sale-ofs-process-explained/

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santonu December 7, 2013 at 9:45 PM

i go through it but still one doubt. In stead of FPO, can GOI sale these huge amount of stake through OFS or whether any limit is imposed on OFS.I think so ,thats why Govt took the FPO path instead of OFS

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Shiv Kukreja December 8, 2013 at 10:32 AM

No, it is not like that. There is no limit. The govt. raised Rs. 11,500 crore from NTPC OFS in February 2013 and Rs. 12,000 crore from ONGC OFS in March 2012.

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Shiv Kukreja December 7, 2013 at 7:48 PM

I have just posted it – “Power Grid FPO @ Rs. 85-90 – Basis of Allotment, Credit of Shares into Demat A/cs., Refund & Listing Info”

http://www.onemint.com/2013/12/07/power-grid-fpo-rs-85-90-basis-of-allotment-credit-of-shares-into-demat-acs-refund-listing-info/

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Shiv Kukreja December 9, 2013 at 1:54 PM
Shiv Kukreja December 10, 2013 at 8:55 PM
Prakash December 11, 2013 at 1:01 AM

When is the listing?

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Shiv Kukreja December 11, 2013 at 7:20 PM

Date is yet to get announced. It should be December 20th or December 23rd.

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Shiv Kukreja December 18, 2013 at 7:57 PM

Power Grid FPO shares are permitted to trade on the stock exchanges (both NSE & BSE) with effect from tomorrow, December 19th.

Source: http://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20131218-11

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ketki April 17, 2014 at 3:15 PM

Any views on the upcoming “WONDERLA HOLIDAYS LTD : WONHOL” ipo? opening 21st April…worth a buy ? I personally have visited their park in bangalore and was quite impressed with cleanliness and quality of the park/rides…

Reply

Ikjot April 17, 2014 at 6:09 PM

Hi Shiv,

Waiting for your analysis/recommendation on WONDERLA HOLIDAYS LTD.

Regards

Reply

Shiv Kukreja April 19, 2014 at 1:01 PM

Hi Ikjot, Hi Ketki,
I’ll try to cover it tomorrow.

Reply

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