The Hindu Business Line : Rural Electrification Corp IPO to raise up to Rs 1,640 cr

Mr A.K. Lakhina (right), Chairman and Managing Director, Rural Electrification Corporation Ltd, with Mr Devender Singh, Joint Secretary, Ministry of Power at a press conference in Mumbai on Thursday.

Our Bureau

Mumbai, Feb.7 State-owned Rural Electrification Corporation proposes to raise up to Rs 1,640 crore through an initial public offering of 15.61 crore equity shares.

The IPO opens on February 19 and closes on February 22. The price band has been set at Rs 90-105. At the lower end of the band, the company will raise Rs 1,400 crore and at the cap Rs 1,640 crore.

Half of the shares on offer constitute a fresh offer of equity while the other half is being divested by the Government. There is a reservation of 39 lakh shares for employees at issue price.

The offer constitutes 18.1 per cent of the company’s post issue paid-up capital, said Mr Anil Kumar Lakhina, Chairman & Managing Director, at a news conference on Thursday.

REC is a State-owned ‘mini-Ratna’ company. It lends to power projects, chiefly to State-owned power units but also to private companies, in transmission and distribution, power generation, maintenance, and renewable energy.

Volatile market

Considering the reasonable pricing as well as size of the issue, REC expects the issue to fetch a robust response, even in the currently volatile market, Mr Lakhina said.

An official with a lead manager to the issue said that being a public sector company, REC’s planning for the issue had to be done months in advance, and one could not have foreseen then that markets would be in such a state.

“But we expect the kind of investors who looked at PowerGrid to subscribe to REC too. A lot of investors such as pension funds, are likely to show interest,” he said. PowerGrid, which raised more than Rs 2,900 crore, was subscribed over 64 times.

Reliance Power raised Rs 11,500 crore last month, through an issue that was subscribed 73 times. IL&FS Investsmart Securities Ltd, SBI Capital Markets and ICICI Securities Ltd are the book running lead managers to the REC issue.

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