The follow on public offer by the central transmission utility consists of new shares of 10 percent by the company and sale of another 10 percent by the government.
The proceeds from the fresh issue will be used for expansion over the next few years, Chairman and Managing Director S.K. Chaturvedi told reporters on Wednesday.
The government plans to raise roughly $8.5 billion from share sales in 2010/11, part of a divestment programme in 60 state-run firms over next few years, as it looks to cut fiscal deficit and raise spending on social welfare.
So far this year, the government has only raised $240 million through an IPO by utility SJVN and another $211 million from a 10 percent share sale in Engineers India, but an 11 percent gain in September in the main stock index could speed up offerings.
The Power Grid issue will follow an up to $3 billion initial public offer by state-owned Coal India, which is expected to be the largest share sale ever by an Indian company. That offer will be open from Oct. 18-21.
It is likely to be followed by a $1.8 billion stake sale in Steel Authority of India in January.
Goldman Sachs, JPMorgan, SBI Capital Markets and ICICI Securities are the lead managers for the Power Grid offer.
TO LEASE TOWERS
Power Grid, which currently holds a network of 150,000 transmission towers across India, plans to lease out some of these to telecom companies.
"We will invite bids from telecom companies on an experimental basis in the next three-four months. Any telecom company can participate in the bids," Chaturvedi said.
The company hopes to get revenue of 500 million rupees in the first year from leasing towers, he said.
At 0749 GMT, shares in Power Grid, valued by the market at $9.9 billion, were trading up 2.6 percent in a Mumbai market down 0.5 percent.
The stock is, however, slightly down in the year to date while the main index has risen about 15 percent.
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