The government has approved disinvestment in transmission firm PowerGrid Corporation through a follow-on public offer to raise about 8,400 crore rupees.The Cabinet Committee on Economic Affairs on Thursday gave its nod to the 20 per cent follow-on offer (FPO) by PowerGrid. The company would issue 10 per cent fresh equity, while the Centre would divest 10 per cent of its stake in the PSU. The government holds 86.36 per cent stake in PowerGrid. The offer comprises over 84 crore equity shares of 10 rupee each constituting 20 per cent of existing paid-up capital. At current market valuation, the FPO is likely to mop up about 8,400 crore rupees.Besides disinvestment of the government stake, the fresh capital raising would be used for part funding investment requirement of about 58,000 crore rupees of the PSU. AIR correspondent reports, the company had hit the capital market in October, 2007, with its maiden public offer and raise 10 per cent fresh equity and the government divested 5 per cent of its stake. In an effort to raise 40,000 crore rupees from disinvestment during the current financial year, the government would sell stake in about 10 more PSUs, including Indian Oil, Coal India, SAIL, RINL and Shipping Corporation. The company targets to augment transmission capacity to 23,400 MW in the current fiscal from 19,800 MW at present.