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UPDATE 1-India Power Grid offer covered 14.5 times on last day

By Prashant Mehra MUMBAI, Nov 12 (Reuters) - Power Grid Corp of India's $1.7 billion share sale was subscribed 14.5 times on its final day, underlining investor demand for attractively priced offers and building momentum for upcoming state share sales. The share sale is part of India's ongoing divestment programme to sell stakes in some 60 firms over the next few years, taking advantage of a boost from record foreign funds flowing into Indian stocks. The offer followed on the heels of an enthusiastic response to a $3.4 billion IPO by Coal India, which listed at a 40 percent premium last week. "Assuming the market holds on, the coming offers should get a similar response. Because as Coal India and this offer have shown, there is appetite, and liquidity is not an issue," said Ambareesh Baliga, vice president at Karvy Stock Broking. "The pricing has been the most important thing. But the offers have been helped by the overall market, which is in much better shape than compared to during earier government offers." Individual investors, who had been apprehensive in bidding for all the shares available to them in some recent government offers, applied for 2.7 times the shares on offer, attracted by a 5 percent discount on the final price. The institutional order book, which closed on Thursday, had been heavily oversubscribed, attracting bids worth $9.3 billion from foreign investors alone.. Most bids have come at the top end of the 85-90 rupees price range, data showed. Strong investor demand means the offer is likely to be priced at the top of the range when final pricing is decided next week. Power Grid is the world's third-largest power transmission company, operating 95 percent of India's interstate network and carries half of all power generated in the country. The share sale, which opened Tuesday, was fully subscribed on its first day with the stock seen as a safe bet on demand growth in a power-starved nation. India aims to halve its peak-hour power deficit of nearly 14 percent over the next two years and triple its generation capacity over the next decade. On Friday, Power Grid's shares ended down 1.6 percent at 99.60 rupees in a weak Mumbai market. Upcoming state offers include Manganese Ore India Ltd's IPO to raise up to $270 million, Hindustan Copper's $1.6 billion share sale, and Shipping Corp of India's $320 milion share sale. (Editing by Bryson Hull) ((prashant.mehra@thomsonreuters.com; +91 22 6636 9029; Reuters Messaging: prashant.mehra.reuters.com@reuters.net)) Keywords: INDIA POWERGRID/ (If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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