PTC India Financial Services (PFS), an arm of the state-run PTC India, has received a nod from market regulator SEBI for an initial public offering (IPO) and plan to come out with it by mid-March. This clearly shows that firms are still upbeat about investor appetite despite a weak run in the markets this year.
The company can raise between Rs. 500-800cr through the IPO but they have not yet set a target. Thakur said that the fundraising will depend on the book value of their shares, which currently stands at Rs. 15.21.
The funds are to be used for the company’s growing operations, as well as to improve their debt raising ability and credit ratings. "Once you do the IPO, for subsequent (fund) raises, you have a benchmark," said T N Thakur, Chairman and Managing Director, PTC.
"PFS is on a steep growth path and the growing power requirements in the country will help the company grow further," PFS Director Ashok Haldia said.
PTC has a 77% stake in PFS’s present equity capital of Rs 600cr and will have 60% holding post the IPO. GS Strategic Investments, a unit of Goldman Sachs and Macquarie India Holdings, a unit Macquarie Group Ltd, each hold 11.20% and will have 8.7% and 3.5% stakes in the company, respectively, post the issue. The issue will consist of 12.75cr fresh equity shares in the market.
Avendus Capital, SBI Capital Markets, JM Financial Services, ICICI Securities and Almondz Global Securities are the arrangers to the issue.
PFS posted a profit of Rs 254.52 million, on total income of Rs 534.90 million for fiscal 2010, according to the draft red herring prospectus it filed with the Securities and Exchange Board of India
PFS is promoted by PTC India as a special purpose investment vehicle to provide financial services to the entities in energy value chain, which includes investing in equity and extending debt to power projects in generation, transmission, distribution, fuel related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers and EPC contractors, etc.
PFS also provides non-fund based financial services, adding value to Greenfield and Brownfield projects at various stages of growth and development.
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