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  • 1. RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956Book Building IssueDated October 21, 2010 POWER GRID CORPORATION OF INDIA LIMITED Our Company was incorporated in New Delhi on October 23, 1989 under the Companies Act, 1956 (the Companies Act) as a public limited company under the name National Power TransmissionCorporation Limited.For more information on change in the name of our Company and our registered office, see History and Certain Corporate Matters on page 130. Registered Office: B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi 110 016, India Tel: +91 (11) 2656 0112 Fax: +91 (11) 2656 4849 Corporate Office: Saudamini, Plot No.2, Sector 29, Gurgaon 122 001, Haryana, India Tel: +91 (124) 2571 700 Fax: +91 (124) 2571 848 Company Secretary and Compliance Officer: Ms. Divya Tandon, Company Secretary Tel: +91 (124) 2571 968 Fax: +91 (124) 2571 891 E-mail: investors@powergridindia.com. Website: www.powergridindia.com. Promoter: President of India, acting through the Ministry of Power, Government of India (MoP) and the Ministry of Development of North Eastern Region, Government of India(MoDoNER)FURTHER PUBLIC ISSUE OF 841,768,246 EQUITY SHARES OF ` 10 EACH (EQUITY SHARES) FOR CASH AT A PRICE OF ` [] PER EQUITY SHARE OF POWER GRIDCORPORATION OF INDIA LIMITED (POWERGRID, OUR COMPANY OR THE ISSUER) AGGREGATING ` [] MILLION (THE ISSUE). THE ISSUE COMPRISES A FRESHISSUE OF 420,884,123 EQUITY SHARES BY OUR COMPANY (THE FRESH ISSUE) AND AN OFFER FOR SALE OF 420,884,123 EQUITY SHARES BY THE PRESIDENT OF INDIAACTING THROUGH THE MINISTRY OF POWER, GOVERNMENT OF INDIA (THE SELLING SHAREHOLDER) (THE OFFER FOR SALE). THE ISSUE COMPRISES A NETISSUE TO THE PUBLIC OF 838,378,646 EQUITY SHARES (THE NET ISSUE) AND A RESERVATION OF 3,389,600 EQUITY SHARES FOR SUBSCRIPTION BY ELIGIBLEEMPLOYEES (AS DEFINED HEREIN) (THE EMPLOYEE RESERVATION PORTION). THE ISSUE WOULD CONSTITUTE 18.2% OF THE POST ISSUE PAID-UP EQUITY CAPITALOF OUR COMPANY AND THE NET ISSUE WOULD CONSTITUTE 18.1% OF THE POST ISSUE PAID-UP EQUITY CAPITAL OF OUR COMPANY. THE FACE VALUE OF THEEQUITY SHARE IS ` 10 EACH.THE PRICE BAND, RETAIL DISCOUNT, EMPLOYEE DISCOUNT AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDER INCONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND ADVERTISED IN THE MUMBAI EDITION AND DELHI EDITION OF THE FINANCIAL EXPRESS AND THEDELHI EDITION OF THE JANSATTA AT LEAST ONE WORKING DAY PRIOR TO THE BID OPENING DATE, WITH THE RELEVANT FINANCIAL RATIOS CALCULATED AT THEFLOOR PRICE AND AT THE CAP PRICE.**Discount of ` [] to the Issue Price is being offered to Retail Bidders (Retail Discount) and Eligible Employees (the Employee Discount), respectively. In case of revision in the Price Band, the Bidding Period will be extended for at least three additional Working Days after the revision of the Price Band subject to the Bidding Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (the BSE) and the National Stock Exchange of India Limited (the NSE), by issuing a press release, and also by indicating the change on the websites of the Book Running Lead Managers (BRLMs) and at the terminals of the members of the Syndicate. This Issue is being made through the Book Building Process where up to 50% of the Net Issue will be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs) (QIB Portion). For more information, see Issue Procedure on page 376. Further, 5% of the QIB Portion will be available for allocation on a proportionate basis to Mutual Funds only. The remainder will be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. In addition, not less than 15% of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue will be available for allocation on a proportionate basis to Retail Bidders, subject to valid Bids being received at or above the Issue Price. Any Bidder may participate in this Issue through the ASBA process by providing the details of the ASBA Accounts in which the corresponding Bid Amounts will be blocked by the Self Certified Syndicate Banks (SCSBs). For more information, specific attention is invited to Issue Procedure on page 376. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and Bidders should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Bidders are advised to read the Risk Factors carefully before making an investment decision in this Issue. For making an investment decision, Bidders must rely on their own examination of our Company and this Issue, including the risks involved. The Equity Shares offered in this Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. This being a fast track issue under Regulation 10 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended from time to time (SEBI Regulations), our Company filed the Red Herring Prospectus with the Registrar of Companies, National Capital Territory of Delhi and Haryana (RoC) with a copy to SEBI and the Stock Exchanges. Specific attention of the Bidders is invited to Risk Factors on page xiv.ISSUERS ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Company and this Issue which is material in the context of this Issue, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.LISTING The Equity Shares of our Company are listed on the BSE and the NSE. NSE is the Designated Stock Exchange for the Issue. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE SBI Capital Markets Limited Goldman Sachs (India)ICICI Securities Limited J.P. Morgan India Private KARVY COMPUTERSHARE 202, Maker Tower ESecurities Private Limited ICICI Centre, H.T. Parekh Marg Limited PRIVATE LIMITED Cuffe Parade951-A Rational House Churchgate J.P. Morgan Tower Plot No. 17 - 24, Vithal Rao Mumbai 400 001, India Appasaheb Marathe Marg Mumbai 400 020, IndiaOff C.S.T. Road Nagar Tel: +91 (22) 2217 8300 Prabhadevi Tel: +91 (22) 2288 2460Kalina, Santacruz (East)Madhapur Fax: +91 (22) 2218 8332 Mumbai 400 025, IndiaFax: +91 (22) 2282 6580Mumbai 400 098, India Hyderabad 500 081, India Email: powergrid.fpo@sbicaps.comTel: +91 (22) 6616 9000Email: Tel: + 91 (22) 6157 3000Tel : + (91 40) 4465 5000 Investor Grievance E-mail:Fax: +91 (22) 6616 9090powergrid.fpo@icicisecurities.cFax: + 91 (22) 6157 3911Fax : + (91 40) 2343 1551 investor.relations@sbicaps.comEmail: powergrid.fpo@gs.comom Email: project- E-mail: pgcil.fpo@karvy.com Website: www.sbicaps.comInvestor Grievance E-mail: india-Investor Grievance E-mail: powergridfpo@jpmorgan.com Website: www.karvy.com Contact Person: Mr. Harsh client-support@gs.comcustomercare@icicisecurities.coInvestor Grievance E-mail:Contact Person: Mr. M. Soni/Ms. Neha PruthiWebsite: minvestorsmb.jpmipl@jpmorgan.com Muralikrishna SEBI Registration No.:http://www2.goldmansachs.com/Website: Website: www.jpmipl.com SEBI Registration No: INM000003531worldwide/india/indian_offerings.www.icicisecurities.comContact Person: Mr. Manu MidhaINR000000221 html Contact Person: Mr. Vishal SEBI Registration No.: Contact Person: Ms. PriyaKanjaniINM000002970 Subbaraman SEBI Registration No.: SEBI Registration No.: INM000011179 INM000011054BIDDING PROGRAMMEBID CLOSES ON (FOR QIB BIDDERS) NOVEMBER 11, 2010 BID OPENS ONNOVEMBER 9, 2010BID CLOSES ON (FOR ALL OTHER BIDDERS) NOVEMBER 12, 2010

2. TABLE OF CONTENTSSECTION I - GENERAL......................................................................................................................................... iDEFINITIONS AND ABBREVIATIONS ........................................................................................................... iCERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA ................... xAND CURRENCY OF PRESENTATION .......................................................................................................... xNOTICE TO INVESTORS ................................................................................................................................. xiiFORWARD-LOOKING STATEMENTS ......................................................................................................... xiiiSECTION II - RISK FACTORS ......................................................................................................................... xivSECTION III INTRODUCTION ....................................................................................................................... 1SUMMARY OF INDUSTRY............................................................................................................................... 1SUMMARY OF BUSINESS ................................................................................................................................ 3SUMMARY FINANCIAL INFORMATION .................................................................................................... 11THE ISSUE .............................................................................................

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