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

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

Login to www.icicidirect.com account.
Click on 'Offer for Sale' Link under Equity Segment.
On OFS buy page select Stock code (auto populated in the drop down menu)
Enter the Quantity
Select 'Cut Off' Option or bid at a Price
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 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 Comments

20. Ankur Goell

| Link|July 27, 2015 4:08:42 PMReply

I do not know why people do not apply their brain. Some people bid over 270. When they are bidding over 270 than they can purchase it from open market. Why they are bidding in OFS. They are spoiling the bidding process. OR may be there are manipulating the price. See PFC closed at 252.55 which is lower than offered price.

19. ravijai

| Link|July 27, 2015 2:36:12 PMReply

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."

18. PRAKASH

| Link|July 27, 2015 2:13:51 PMReply

In an offer for sale price is discovered by the price at which bidding is done.
Right now the shares earmarked for retail category is oversubscribed by CUT OFF bidders.
This means that the issue is oversubscribed by retail bidders who have agreed to buy the shares on offer at any price.
In this scenario how will price bidders get any shares?
Becatheoretically the highest bid may have come from someone at Rs 285.But by opting for CUT OFF even if the offer price is Rs 285.10, it will be fully taken up as the issue is oversubscribed by CUT OFF price bidders itself.
No one other than bidders at CUT OFF will get any share, and the issuer will be able to sell them at the maximum price.
Is this a correct interpretation.
Please clarify URGENTLY as the issue will close at 3.30

17. dhaval

| Link|July 27, 2015 1:43:42 PMReply

as per current situation at what price we should bid. cut off/258/259

16. deep

| Link|July 27, 2015 1:41:59 PMReply

in retail category, for how many shares one can apply at cut off prise. Please tell

15. Vijay

| Link|July 27, 2015 1:37:44 PMReply

What will be the cut off price of PFC OFS

14. Thiagarajan Ramasamy

| Link|July 27, 2015 1:36:32 PMReply

Mr Ravijai, You are correct. As there is 5 % Retail discount it is better to place some price bids also.

13. ravijai

| Link|July 27, 2015 1:02:43 PMReply

I have a simple doubt, if retail bidders who bids above the cut-off price get all the shares, who bids at cut off will get nil shares, am i right here?

12. Thiagarajan Ramasamy

| Link|July 27, 2015 12:25:04 PMReply

PFC OFS Allotment is on Price Priority Basis. Cut Off Price is the least price upto which Non Retail Bidders are allotted. In the Retail Category all those who bid over the cut off price will get allotment. Depending upon the extent of over subscription those who bid at cutoff will get full or proportionate allotment. Other Retail Bidders will not get any allotment

11. Thiagarajan Ramasamy

| Link|July 27, 2015 12:18:39 PMReply

PFC OFS Allotmenment is on Price Priority Basis. C

10. Ashok Maniar

| Link|July 27, 2015 7:30:59 AMReply

If retail BID above "CUT OFF PRICE" Will get 5% discount or not?
Whether this BIDDER get PRIORITY above " cut off bidder " or not?

9. devender

| Link|July 27, 2015 1:43:54 AMReply

is it profitable for retail investor

8. DURAISWAMY

| Link|July 26, 2015 9:40:51 PMReply

is it available on sbicap securities ltd

7. Chittorgarh.com Team

| Link|July 26, 2015 7:27:21 PMReply

Not sure about Sharekhan but we have added instructions about ICICI above.

6. siddharth

| Link|July 26, 2015 9:47:48 AMReply

how to apply in PFC OFS ? through Bank ( i mean like online IPO )

or through broker ( in my case sharekhan.com ) ?

thanks.

5. djpv

| Link|July 25, 2015 8:54:23 PMReply

PFC stake sale floor price at Rs 254 disinvestment on Mon
PFC would be the second PSU to be divested under the Government''s disinvestment programme of the current fiscal.
Read Full Story

4. jigaReligare

| Link|July 25, 2015 4:18:14 PMReply

PLS CONFIRM ABOUT ALLOTMENT SYSTEM
BCOZ IN RELIGARE SAID THAT ALLOTMENT IS DONE ON PROPORTONET BASIS IF CUT OFF AT DOUBLE BID

3. Hvagjani

| Link|July 25, 2015 2:23:01 PMReply

Sources:
PFC OFS Floor price Rs. 254/-.
Opens on 27th July 2015
Retail has option of cut off.
But it will not be offered on proportion.
Retail customer who quotes highest prize above cutt off prize, get priority in allotment.
Pls check OFS CIRCULAR before initiating action.

2. jigaReligare

| Link|July 25, 2015 1:56:48 PMReply

2000 for 2 lac application

1. jigaReligare

| Link|July 25, 2015 10:07:25 AMReply

any gray market premium

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