New Delhi, July 27 (IANS): The government's 5 percent stake sale on Monday in the Power Finance Corp (PFC) was fully subscribed with robust response from both institutional as well as retail investors for 13.22 crore shares as against the offer for 6.6 crore shares.

The government has set a floor price at Rs.254 per equity share for divestment of 5 percent of its stake in PFC, it had said in a stock exchange filing on Saturday.

The government holds 72.80 percent equity in the company, while the stake sale is expected to garner around Rs.1,600 crore.

The floor price of Rs.254 is at a discount of 2.14 percent over Friday's closing price of the stock at Rs.259.55.

PFC stake sale would be the second such sale this fiscal by the government after divesting stock in REC in April.

It is the first disinvestment under the modified offer for sale (OFS) rules of markets regulator Sebi under which companies are allowed to disclose stake sale plans two banking days ahead of the issue.

Earlier, 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 undertaking up for divestment.

The government has an ambitious disinvestment target of Rs.41,000 crore through stake sale in public sector units, and another Rs.28,500 crore through strategic stake sale by transfer of management control, during the current fiscal.

PFC stock closed on Monday at Rs.254.05 a share, down 5.50 points, or 2.12 percent, over its previous close on the Bombay Stock Exchange (BSE).