REC FPO Gets Fully Subscribed On Final Day (23-Feb-2010)
Rural Electrification Corporation's (REC) Follow-on Public Offer (FPO) got fully subscribed on the final day today, with most of the bids coming at Rs. 205 per share.
The company received bids for more than 21.20 crore shares as against 17.17 crore shares offered.
Majority of the bids came in at Rs. 205 per share accounting for more than 8 crore, while over 5 crore bids came in at Rs. 204 per share and 180.27 lakh at Rs. 207.
About 24 institutional investors, including foreign institutional investors, such as - Prudential, Leg Mason, GMO, Reliance MF, ICICI Prudential and LIC have subscribed to the issue.
The floor price for the FPO was fixed at Rs. 203, which is nearly 8 % lower than the prevailing market price. And if it is fully subscribed, then the issue would fetch about Rs. 3,451 crore.
The subscription for the FPO was opened on 19th of February and closed today.
After the poor investor response to the NTPC offer earlier this month, the pricing committee for the REC issue had decided earlier to offer a larger discount for the FPO.
The company plans to sell 17.17 crore shares (including fresh issue of 12.87 crore shares and an offer for sale of 4.29 crore shares), resulting in an equity dilution of 17.39 %.
The government's stake in the company would come down to 66.82 % from the current 81.82 %.
REC was incorporated on July 25, 1969 under the Companies Act 1956. REC is a listed Government of India Public Sector Enterprise. Its main objective is to finance and promote rural electrification projects all over the country. It provides financial assistance to State Electricity Boards, State Government Departments and Rural Electric Cooperatives for rural electrification projects as are sponsored by them.
REC provides loan assistance to SEBs/State Power Utilities for investments in rural electrification schemes through its Corporate Office located at New Delhi and 17 field units (Project Offices), which are located in most of the States.
The Project Offices in the States coordinate the programmes of REC's financing with the concerned SEBs/State Power Utilities and facilitate in formulation of schemes, loan sanction and disbursement and implementation of schemes by the concerned SEBs/State Power Utilities.
Moreover, the Company has posted a net profit of Rs. 4740.70 mn for the Q-3 ended 31st December 2009 as compared to Rs. 3186.50 mn for the corresponding period of the previous year. Total Income has also increased from Rs. 12754.20 mn for the Q-3 ended 31st December 2008 to Rs. 17061.80 mn for the quarter ended 31st December 2009.
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