Power Finance Corporation (PFC) allotment refers to the process by which shares are allocated to investors who applied for them during a public offering, whether an Initial Public Offering (IPO) or a Follow-on Public Offering (FPO). PFC, a leading non-banking financial company (NBFC) in India, primarily finances power projects. When PFC offers its shares to the public, the demand often exceeds the number of shares available, necessitating an allotment process.
The allotment process is generally governed by guidelines set by the Securities and Exchange Board of India (SEBI). A key principle is to ensure fair and equitable distribution of shares among various categories of investors. These categories typically include:
- Retail Individual Investors (RIIs): Investors applying for shares up to a certain specified value (currently ₹2 lakh).
- Non-Institutional Investors (NIIs): High Net-worth Individuals (HNIs) and corporate bodies applying for shares above the RII limit but below the Qualified Institutional Buyer (QIB) limit.
- Qualified Institutional Buyers (QIBs): Financial institutions, banks, mutual funds, and insurance companies.
- Employees: PFC employees are often given a reserved quota of shares.
If the issue is oversubscribed (i.e., demand exceeds the number of shares offered) within a particular category, a lottery system or proportional allotment method is used to allocate shares. In the retail category, SEBI mandates a minimum allotment of one lot to each eligible applicant if the category is oversubscribed. Remaining shares are then allocated proportionally.
For NIIs and QIBs, allotment is typically done on a proportionate basis. This means that if the category is, for example, ten times oversubscribed, an investor will receive approximately 10% of the shares they applied for. Larger investors, like QIBs, are often allocated a larger proportion of shares due to their significant investment capacity and influence in the market.
After the allotment process is complete, successful applicants receive information about the number of shares allocated to them. This information is usually communicated through email and SMS by the Registrar to the Issue. Shares are then credited to the applicant’s Demat account. Unsuccessful applicants receive a refund of their application money, also processed by the Registrar.
Investors can check their allotment status through the Registrar’s website or the stock exchange website (BSE or NSE) after the allotment date. They will typically need to enter their PAN number, application number, or Demat account number to access the allotment details. Understanding the PFC allotment process is crucial for investors looking to participate in the company’s public offerings and potentially benefit from the growth of the power finance sector in India.
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