The Hindu : Business : REC IPO opens today

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Tuesday, Feb 19, 2008
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Business

REC IPO opens today

Corporate Reporter

Fixes price band at Rs. 90-105

CHENNAI: Rural Electrification Corporation (REC), a public financial institution in Indian power infrastructure, is entering the capital markets with a public issue of 15.61 crore equity shares of Rs. 10 each through book building process at a price of Rs. 95 to Rs. 105. The issue is open from February 19 to 22.

At the lower end of the price band the issue will mobilise Rs. 1,405 core and at the higher end it will be Rs. 1,639 crore.

After the issue the Government’s share holding will come down to 81.82 per cent of the post-issue capital from the present 100 per cent.

Addressing presspersons here on Friday last, H. D. Khunteta, Director (Finance), said the proceeds will be utilised to augment the company’s capital base to meet the future capital requirements arising out of growth in its assets, primarily in its loan and investment portfolio.

The company, ranked among the top ten public sector undertakings for the fiscal 2000, 2002 and 2005, was occupying a key position in the Government of India’s plans for the growth of the Indian power sector, Mr. Khunteta said. Since its inception in 1969, the company’s mandate had evolved to permit it to finance all segments of the power sector.

The company was providing funds to clients and assist them in formulating and implementing various types of power project related schemes. Additionally, the company was financing power projects for its joint sector clients. The aim was to capitalise on the increasing private sector participation in the Indian power sector, Mr. Khunteta said.

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