Power Grid FPO @ Rs. 85-90 – Basis of Allotment, Credit of Shares into Demat A/cs., Refund & Listing Info

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 [email protected]

Power Grid follow-on public offer (FPO) finally got closed yesterday. The issue got 6.74 times oversubscribed and the company successfully raised around Rs. 7,000 crore from the issue.

As the issue has got closed now, the investors are quite eager to know what price has been fixed by the company to issue these shares at, when they will come to know how many shares have been allotted to them, when these shares will get credited to their respective demat accounts, when these shares will be admitted to trade on the stock exchanges.

Here are some of those post-offer FAQs regarding Power Grid FPO and my responses to the best of my knowledge and research capabilities:

How many times the issue has got subscribed and how many shares will I be allotted? I have applied for ‘X’ number of shares, what is the system for allotment – is it based on lottery system, proportionate system or guaranteed allotment of shares?

Vivek also put up a similar query today.

Vivek December 7, 2013 at 4:05 pm

How many shares can I get for 2L application if issue is subscribed 2.17 time? I will get 6 lots minimum- how much more?

The issue has got oversubscribed to the tune of 6.74 times overall and 2.17 times in the retail investors category. Approximately 3,89,142 bids have got placed on the stock exchanges during the offer period.

As per the new rules for Basis of Allotment – “Every retail participant gets a minimum bid lot allotted, irrespective of his/her application size. This is subject to availability of shares.” So, the allotment system is neither lottery based nor it would be proportionate or guaranteed allotment.

As the retail investors category in the issue has got 2.17 times subscribed, I think there are enough number of shares available in this category for every retail investor to get at least one lot of 150 shares allotted. In a way, it is guaranteed allotment, but only of 150 shares.

If you’ve applied for 2,250 shares or 2,100 shares, it is no guarantee that you’ll get these many shares allotted, even in a proportionate manner.

You will get to know the exact number of shares allotted to you only once the basis of allotment gets finalised.

What price has been fixed by the company to issue these shares at?

Simple asked me to guess the “Cut-Off” price yesterday.

Simple December 6, 2013 at 11:53 pm

Hi Shiv!

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

The board of Power Grid is scheduled to meet on Monday and after its consultation with the book running lead managers (BRLMs), will fix the final issue price i.e. the cut-off price. I expect the cut-off price to get fixed at Rs. 90 per share. If it gets fixed below this price, it will be a bonus for the investors.

By when will I get to know how many Power Grid shares have been allotted to me? If I get certain number of shares allotted, by when will the shares be credited to my demat account?

SPPatel, a relatively new participant in the FPO/IPO process, wanted to know about the date by which he can expect the shares to get allotted and the allotted shares to start trading.

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.

Post closure of the FPO, this is the most common query the investors have and the following table, which I have taken from page 418 of the Red Herring Prospectus filed by Power Grid dated November 15, 2013, is the best source to get all our queries answered.

Power Grid, in consultation with the NSE, the designated stock exchange, will finalise the basis of allotment on or about December 16th. As we can check from the table above, we’ll get to know the number of shares allotted to each of us either by December 16th or December 17th. The Registrar to the issue will initiate the refund process as early as December 17th.

After approval of the basis of allotment by the NSE, an allotment advice will be sent to each successful investor, who has been or is to be allotted Power Grid shares.

Investors can expect the FPO shares to get credited into their respective demat accounts latest by December 18th or December 19th. Once these shares get fully allotted, we can expect these shares to start trading on the stock exchanges by December 20th.

Power Grid will ensure that the whole FPO process gets completed within 12 working days from the closing date of the issue, including the finalisation of basis of allotment, refund of excess investment amount, allotment & credit of shares to the successful bidders and commencement of trading.

If there is any delay in the refund of investment amount, Power Grid will have to pay interest at the rate of 15% per annum.

Finally, if you have any other FPO related query, please share it here. I’ll try to answer it as soon as possible. If you have any allotment or refund related grievance, then you need to contact Karvy Computershare, the Registrar to the issue.

I’ll keep updating this post as and when I get any post FPO info. If any of you get info about the issue price, allotment, refund, listing or any related news, please share it here.

Issue Price Fixed At – Rs. 90 per share with discount of Rs. 4.50 for the Retail Investors

Basis of Allotment

(Source: Times of India)

Refund Process Started From – December 17th (Updated on December 17th)

Credit of Equity Shares into Demat Accounts – December 18th (Updated on December 18th)

Trading in FPO Shares Begins From – December 19th (Updated on December 18th)