Indian Stock Market

REC IPO opens Feb 19; price band Rs 90-105/shares

Rural Electrification Corporation will enter capital market on February 19 with a public issue of 15,61,20,000 shares through a 100 per cent book building process.

The price band of shares of face value Rs 10 each has been fixed at Rs 90-105 per share. The issue closes February 22.

The net issue to the public will be up to 15,22,17,000 shares constituting 18.18 per cent of the fully diluted post-issue capital of REC.

REC proposes to utilise the net proceeds to augment its capital base to meet the future capital requirements arising out of growth in its assets, primarily its loan and investment portfolio. It is seeking top strengthen its capital base to improve its borrowing capacity in order to support the future growth in its assets.

Domestically, the company holds long-term borrowings ratings of AAA/stable from CRISIL, LAAA from ICRA and AAA(ind) from Fitch. Internationally it holds long-term borrowings ratings of BBB and Baa3 from Fitch and Moody’s respectively.

As a public sector undertaking, REC has been accorded as Mini Ratna Grade-I status.

President of India, acting through nominees from the Ministry of Power currently holds 100 per cent of the issued and paid up capital of the company. After the issue, Government of India’s shareholding will be 81.82 per cent of the diluted post issue paid up capital.

IL&FS Investmart Securities, ICICI Securities and SBI Capital Markets are the book running lead managers to the issue