Power Finance Corp Offer for Sale (OFS) opens on 27 July 2015

Published on Friday, July 24, 2015 by Dilip Davda | Modified on Friday, November 1, 2019

Power Finance Corp Offer for Sale (OFS) opens on 27 July 2015

The Government of India is reducing its stake in Power Finance Corporation Ltd (PFC) through the route of 'Offer for Sale' (OFS). PFC is a Government undertaking and a Navratna Company, providing financial support to Indian Power Sector.

The issue is available online for customers to apply on Monday, July 27, 2015 between 9:15 am to 3:30 pm.

Floor Price for the OFS is kept at 254 and a discount of 5% to Retail investors is offered on allotment Price.

PFC OFS Issue Highlights

  • Symbol: PFC
  • Floor Price: Rs. 254
  • Lot Size: 1 Equity Share
  • Discount For Retail Investors: 5% to Cut-off Price
  • Face Value: Rs 10
  • OFS Bidding Time: 9.15 AM to 3.30 PM
  • Issue Size: 6,60,02,035 Equity Shares
  • Retail: 1,32,00,407
  • Non Retail: 5,28,01,628
  • Listing On: NSE and BSE

Steps for applying for PFC OFS through ICICI Bank Customers

  1. Login to www.icicidirect.com account.
  2. Click on 'Offer for Sale' Link under Equity Segment.
  3. On OFS buy page select Stock code (auto populated in the drop down menu)
  4. Enter the Quantity
  5. Select 'Cut Off' Option or bid at a Price
  6. The status of the order can be checked on Equity Order book

PFC OFS Review

Government of India - Disinvestment Department has notified BSE for 'Offer for Sale' of Power Finance Corporation Ltd on Monday i.e. 27.07.15. BSE has informed its members vide its notice that reads as under:

All Market Participants are hereby informed that The President of India, acting through and represented by the Ministry of Power, Government of India is the Promoter of Power Finance Corporation Limited. The Promoter (the 'Seller') proposes to sell up to 6,60,02,035 equity shares of the face value of Rs.10/- each ('Offer Shares') representing 5% of the total paid-up equity share capital of the Company, on July 27, 2015, by SEBI circular no. CIR/MRD/DP/18/2012 dated July 18, 2012, regarding Comprehensive Guidelines for Offer for Sale of Shares by Promoters through the Stock Exchange Mechanism, as amended by SEBI circular no. CIR/MRD/DP/12/2015 dated June 26, 2015, SEBI circular no. CIR/MRD/DP/04/2013 dated January 25, 2013, SEBI circular no. CIR/MRD/DP/24/2014 dated August 8, 2014, and SEBI circular no. CIR/MRD/DP/31/2014 dated December 01, 2014 regarding Expanding the framework of Offer for Sale (OFS) of Shares through the Stock Exchange Mechanism. The particulars of the above offer for sale are attached to this notice. Market participants are further requested to note that the Exchange would disseminate the details of this Offer for Sale on BSE Website - www.bseindia.com.

Last traded price of this scrip is Rs. 259.55 ( as on Friday 24.07.15 closing). At this rate, GoI may garner around Rs. 1700 crore in its divestment kitty planned for the current fiscal.

Of the total offer for sale of 66002035 shares, portion for Retail investors is 13200407 shares and rest is for non-retail categories of HNIs, FIIs, MFs, DIIs etc. Allocation will be made on price priority basis.

Retail investors should grab this offer as it will have a discount of 5 % to the cut off price in accordance with the SEBI OFS Circulars.

As per BSE website reports, PFC OFS got subscription as detailed hereunder:

Power Finance OFS Bidding Detail

Total Cummulative Bidded Qty Subscription % of Total
Total 15,41,98,170 233.63%
100% Margin 7,27,35,305 110.20%
0% Margin 8,14,62,865 123.42%

Power Finance OFS Bidding Detail

Non Retail Portion Subscription % of Total
Total 9,49,13,909 179.76%
100% Margin 1,34,51,044 25.47%
0% Margin 8,14,62,865 154.28%

Power Finance OFS Bidding Detail

Retail Portion Subscription % of Total
Total 5,92,84,261 449.11%

Although for retail clearing price is Rs. 261.90, after 5% discount, it will come to Rs. 248.90.

The issue got oversubscribed to the tune of 2.34 times with retail portion getting around 4.49 times and HNI around 1.8 times.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


70. M Jain   I Like It. |Report Abuse|  Link|Jul 30, 2015 11:24:33 AMReply
Jise bhi allotment nahin mela woh zayda sukhi hai kynki 249.60 rs me milane ke baad se trade niche hi kar raha hai. Is bar koi bhi govt ka ofs aaye don''t invest. Sabaki halat kasti hai- PFC & REC recent before IPO- NHPC/ MOIL / SAIL etc.

Avoid PSU issues whether its is OFS/IPO
69. Sanjeev   I Like It. |Report Abuse|  Link|Jul 28, 2015 11:11:15 PMReply
Today''s closing price is 245.45, which is lower then the price OFS retail investors will got the shares at 248.90 :(

68. Aniket   I Like It. |Report Abuse|  Link|Jul 28, 2015 10:13:53 PMReply
Actually why people are biding for higher prices if you are getting it in very less price in secondary market.
Max to max Bid for 1 or 2 rupees more than floor price.correct way to bid rather biding 30 to,40 rs higher.if brokerage houses arw doing this.
Then sebi has to introduce price range for OFS as well.
Otherwise you will be always in loss.
67. Thiagarajan Ramasamy   I Like It. |Report Abuse|  Link|Jul 28, 2015 9:55:12 PMReply
Lesson from PFC OFS ( FIASCO ). Had Retail Investors allowed to bid only at cut off, instead of bidding and re bidding at higher price points keeping in mind the 5% discount. every one would have received proportionate allotment at the cut off price of 254.10 less 5% discount i.e at Rs.241.40 per share and would have escaped unhurt. iS sebi listening ?
66. Sunil   I Like It. |Report Abuse|  Link|Jul 28, 2015 9:05:20 PMReply
We must raise voice and let people in PFC, & SEBI know our views..... Where can we go and complaint...any site?
65. atul   I Like It. |Report Abuse|  Link|Jul 28, 2015 8:51:38 PMReply
Better when next time ofs come just take sell posituon in F&O.as obvious sell pressure would come on those who bid very high
64. M Jain   I Like It. |Report Abuse|  Link|Jul 28, 2015 5:15:38 PMReply
got pfs shares 380 at Rs. 249.69 at cut off price of Rs. 261.90 thru MOSL. Unable to understand why bid for higher when it was trading around 257 and now today close at 246.10. Instead of gain it is loss to retail investor whereas broker got brokerage. What a rule of SEBI to loot retail investor. In future no body will participate in ofs. Dilip Sir on your recommendation invested now it is in loss. Please advise for further. Should I booked loss or hold ? PLLLLLLLLLLLLL
63. ravijai   I Like It. |Report Abuse|  Link|Jul 28, 2015 3:54:41 PMReply
hi yogesh / mark

Thats how the system has been planned by SEBI, brokerages are merely articulating the method for easy understanding. The cut-off price methodology of IPO and OFS are different.

Even I haven''t got any shares after bidding at 258.80.
The method has to be changed by SEBI
62. mark bab   I Like It. |Report Abuse|  Link|Jul 28, 2015 3:31:54 PMReply
D/ Yogesh...you are absolutely right...it is mockery of rule & we are made fools.
when this cut-off drama was not to be followed than when did it was said that it is the first OFS with new rules to apply oat cut-off price.

i also applied at cut-off...got nothing.

wont apply in anu PSU ofs in future...just a waste og time & blocking of money.
61. Yogesh agarwal   I Like It. |Report Abuse|  Link|Jul 28, 2015 3:09:06 PMReply
Hi Ravijai,
I think the offer for sale announcement by the issuer should be the document to follow and not individual brokerages. It is very clear about the cut-off price. They have not followed this at all and that is ridiculous. If you read the allocation methodology given in the offer for sale announcement it will become very clear. If you dont have that i can send you scanned copy by mail or on whats app.
60. ravijai   I Like It. |Report Abuse|  Link|Jul 28, 2015 2:46:20 PMReply
Hi Yogesh,
Nobody messed up anything, the system is flawed, thats it.
Nobody guarantees you shares even if you bid at cut-off becathe shared are allotted in price priority. In this case though the cut off was 254.10 (am not sure the exact value) there were many retail investors (not actually retail investors but brokers who used retail accounts to garner the 5% discount) who had placed bids at very high prices to get confirm allotment.

From Icici direct,
"In PFC OFS, Allocation Methodology is Price Priority i.e. retail customer who have bid at higher price will get preference in allotment, they would get shares at the bidded price less 5% discount. So if a retail customer bids at 256 and another at 255 (and assuming cut off price discovered is also at 255), customer bidding at 256 will get preference in allotment and he will get discount of 5% on Rs 256."
59. Yogesh agarwal   I Like It. |Report Abuse|  Link|Jul 28, 2015 2:31:33 PMReply
Dear Akash, In the offer advertisement published in economic times on saturday, it was clearly mentioned that " Cut-off price means the lowest price at which the offer shares are sold, as shall be determined based on all valid bids received in the non-retail category. Allocations to Retail Investors shall be made based on the Cut-off price." They have not followed this method at all. Thats why i think this must be escalated as most of the people who applied at cut off price have not received any allotment. Someone have messed up the whole thing making retail investors look like fools.
58. atul    I Like It. |Report Abuse|  Link|Jul 28, 2015 1:52:57 PMReply
Guys this is the best time to enter in Pfc @247.
57. Sunil   I Like It. |Report Abuse|  Link|Jul 28, 2015 1:14:44 PMReply
Can someone pl. let me know why retail investor who has applied on cut off has not received any allocation? What is the logic and reason?
56. gautam jain   I Like It. |Report Abuse|  Link|Jul 28, 2015 12:43:44 PMReply
It was clearly mentioned in notice of OFS submitted to sebi in end of page 1, that allocation to retailers will be done at cutoff price of non retail segment.
55. dhaval   I Like It. |Report Abuse|  Link|Jul 28, 2015 12:42:56 PMReply
ye OFS me retails investor ko murkh banane ka programme lag raha he salo ne floor price cut to cut rakha , maximum bid cut off mila phir bhi allotment nahi diya ,aaj stock 245 ke low pe gaya , aur cut off pe asure allotment ke vado se mukar gaye,
54. S C Kalia   I Like It. |Report Abuse|  Link|Jul 28, 2015 11:59:00 AMReply
i applied for 745 shares at cut off price under retail category but no allotment to me Why? what is the basis of allotment? can anybody explain?
53. Akash, Bombay   I Like It. |Report Abuse|  Link|Jul 28, 2015 11:50:32 AMReply
Dear Yogesh, there is nothing to escalate. Nowhere it was mentioned that cut-off price will be lowest price bid in Non-retail category. It was always going to be lowest accepted retail price
52. Yogesh Agarwal   I Like It. |Report Abuse|  Link|Jul 28, 2015 11:12:37 AMReply
Please escalate this pfc retail matter to the appropriate authorities.
51. rahul   I Like It. |Report Abuse|  Link|Jul 28, 2015 10:56:33 AMReply
where can we find the PFC OFS allotment status?
50. Thiagarajan Ramasamy   I Like It. |Report Abuse|  Link|Jul 28, 2015 10:01:17 AMReply
PFC OFS must be withdrawn and fresh issue shall come on a later date with modified terms after deep analysis by SEBI.
49. Yogesh agarwal   I Like It. |Report Abuse|  Link|Jul 28, 2015 9:10:17 AMReply
Offer advertisement clearly mentioned that retail investors will be allocated shares based on cut off price. It also said that cut off price will be the lowest price bid accepted by the issuer in non-retail category. Someone seems to have messed up the whole thing. The purpose of cut off price to avoid the frenzy of bidding and rebidding witnessed in Rec. SEBI must investigate the whole affair and annul the allotment.
48. ROHIT DHADDHA   I Like It. |Report Abuse|  Link|Jul 28, 2015 8:42:08 AMReply
47. anil   I Like It. |Report Abuse|  Link|Jul 28, 2015 8:36:57 AMReply
Its a Laggard stock anyways, buying at 262 with %% discount comes to around 249 and if you apply brokerage charges, its available at current market price. Doesn''t make sense, Good no allotment.
46. R.K.GANERIWALA   I Like It. |Report Abuse|  Link|Jul 28, 2015 8:13:21 AMReply
45. hitul   I Like It. |Report Abuse|  Link|Jul 28, 2015 2:05:28 AMReply
I had bid for PFC at 265.
I got message that you have receive 750 shares@ 251.8.
Pl inform me when can I sell the shares?
And what is the chances of profit?
44. Ram   I Like It. |Report Abuse|  Link|Jul 27, 2015 10:52:43 PMReply
Those who applied in cut off may not be eligible for discount.
43. Aniket   I Like It. |Report Abuse|  Link|Jul 27, 2015 10:41:12 PMReply
261.50 is after 5% discount or without discount...?
42. Mota Bhai   I Like It. |Report Abuse|  Link|Jul 27, 2015 10:35:42 PMReply
Money released in ICICIDirect. No allotment at 260.10. No clue why. Cumulative quantity at 260.10 is lesser than retail quota!
41. Rajendra Shah   I Like It. |Report Abuse|  Link|Jul 27, 2015 10:08:35 PMReply
PFC Retail price final at Rs.261.90 and HNI at Rs.254.10
40. anil   I Like It. |Report Abuse|  Link|Jul 27, 2015 9:10:12 PMReply
Money released in icicidirect, No allotment. Applied at 258.30
39. Ram   I Like It. |Report Abuse|  Link|Jul 27, 2015 9:02:29 PMReply
I think cut off is 272.80
38. Hemant   I Like It. |Report Abuse|  Link|Jul 27, 2015 8:50:43 PMReply
Any Idea why there is no allotment at cut Off ?
37. Sanjay   I Like It. |Report Abuse|  Link|Jul 27, 2015 8:46:53 PMReply
Pfc no allotment at cut off soon will cross 280
36. Hemant   I Like It. |Report Abuse|  Link|Jul 27, 2015 8:42:26 PMReply
How to check if we got any allotment
35. Shailesh   I Like It. |Report Abuse|  Link|Jul 27, 2015 8:36:31 PMReply
Any idea about allotment?????????
34. Shailesh   I Like It. |Report Abuse|  Link|Jul 27, 2015 7:51:40 PMReply
Retail Section: Clearing/Cut-off Price (Rs.)      261.90 (source:bseindia.com)
33. Pankaj   I Like It. |Report Abuse|  Link|Jul 27, 2015 7:46:46 PMReply
Any news on pricing issue...Please post here.
32. SHAILESH BHANSALI   I Like It. |Report Abuse|  Link|Jul 27, 2015 7:37:39 PMReply
261.95 2.61 TIMES
31. Sunil   I Like It. |Report Abuse|  Link|Jul 27, 2015 7:35:47 PMReply
these may not be genuine retail investors who applied above 260, rather could be brokers who applies using retail accounts to get 5% advantage.
30. Pankaj   I Like It. |Report Abuse|  Link|Jul 27, 2015 7:13:47 PMReply
Below 261.the chances are very low.I myself applied at 258.but I know I will not get.
29. Pankaj   I Like It. |Report Abuse|  Link|Jul 27, 2015 7:11:07 PMReply
In my view the shares will be offered to those who subscribe in between 261 to 262 for retail investor .
28. ankit   I Like It. |Report Abuse|  Link|Jul 27, 2015 6:55:14 PMReply
I meant 260 to 262.05
27. ankit   I Like It. |Report Abuse|  Link|Jul 27, 2015 6:53:48 PMReply
Considering the cumulative demand from both NSE and BSE, the price seems to be settling on 202 to 262.05. However, after 5% discount and brokerages and other charges, at current prices, there may not be any profit.
26. Laxman   I Like It. |Report Abuse|  Link|Jul 27, 2015 6:33:35 PMReply
Rate fixed?
25. anil   I Like It. |Report Abuse|  Link|Jul 27, 2015 6:19:31 PMReply
By 8:30 pm, you will know the status, if amount debited, then you are allotted, if money is released, then no allotment.
24. Aniket   I Like It. |Report Abuse|  Link|Jul 27, 2015 6:00:05 PMReply
When we will get allotment status....?
23. NARESH AJMER   I Like It. |Report Abuse|  Link|Jul 27, 2015 5:32:21 PMReply
muje agar rs.262/- me milte hai to achha rahega unke upar jane se to loss ho jayega
22. Ankur Goell   I Like It. |Report Abuse|  Link|Jul 27, 2015 5:09:49 PMReply
I will be happy not to get share if allotment price will be above 262. for the gain for 2-3 rupee it is not advisable to put your money on stake. If allotment will be above 262 than price after discount will be 249 where PFC share closes at 252.55 today. So getting allotment in OFS will be foolish today at 262.
21. jigaReligare   I Like It. |Report Abuse|  Link|Jul 27, 2015 4:22:25 PMReply
if u done bid above 262 than u will get shares