PFC would be the second PSU to be divested under the Government's disinvestment programme of the current fiscal. In April, Government had sold stake in REC.
Government has set the floor price for 5 per cent stake sale in PFC at Rs 254 a share, a discount of 2 per cent over the market price, which would fetch around Rs 1,600 crore to the exchequer.
The offer for sale (OFS) would take place on July 27.
"The floor price of the offer ... shall be Rs 254 per equity share of Power Finance Corporation (PFC)," the company said in a BSE filing.
PFC would be the second PSU to be divested under the Government's disinvestment programme of the current fiscal. In April, Government had sold stake in REC.
The floor price of Rs 254 a share is at a discount of 2.14 per cent over yesterday's closing price of Rs 259.55.
At the floor price, the government is expected to mobilise around Rs 1,676 crore through the divestment.
At present, government holds 72.80 per cent equity in Power Finance Corporation. After sale of 6.60 crore shares representing 5 per cent stake on offer, government's holding will be reduced to 67.80 per cent.
PFC would be the first disinvestment under the modified OFS rules of Sebi under which companies are allowed to disclose stake sale plans two 'banking' days ahead of the issue.
The Department of Disinvestment had approached Sebi in March saying they do not want trading days in-between the announcement and stake sale.
Earlier, the companies were required to give an advance notice of two trading days before the OFS, which the government says gave scope for speculators to beat down the share price of the disinvestment-bound PSU.
The Department has a Rs 69,500-crore target from PSU disinvestment in the current fiscal, of which Rs 41,000 crore would come from minority stake sale and Rs 28,500 crore from strategic stake sale.
As much as 20 per cent of the issue size is reserved for retail investors and 25 per cent for mutual funds and domestic insurance companies.
The remaining portion is left for institutional investors, which are usually lapped up mostly by domestic financial institutions and foreign funds.
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