Friday, February 22, 2008

Rural Electrification Corporation (REC) IPO Subscribed 4.67 Times

The initial public offer of Rural Electrification Corporation (REC), a state-run power sector lender, got subscribed 4.67 times at 11:00 IST on last day of its issue today, 22 February 2008. The price band for the IPO is Rs 90 to Rs 105. The book building process, which opened on February 19, is scheduled to close on February 22. The issue would constitute about 18.18% of the fully diluted post-issue capital of REC. It is looking to raise about Rs 16.40 billion through sale of 156 million equity shares in a price band of Rs 90-105 in the IPO.

Most of the bids today came from the institutional investors that made the portion reserved for Qualified Institutional Buyers (QIBs) getting subscribed 4.52 times.

Rural Electrification is offering shares in a price band of 90 rupees to 105 rupees. The 156.1 million shares on offer will account for 18.2% of the lender's post-issue capital. The holding of the government, which fully owns the company, will be reduced to about 81.8%. IL&FS Investsmart Ltd., ICICI Securities Ltd. and SBI Capital Markets Ltd. are managing the share sale.

Rural Electrification Corporation is a public sector enterprise and is engaged in financing and promoting transmission, distribution and generation projects across the country. The company provides financial assistance to public sector power utilities at the central and state levels, private sector power utilities, and joint sector clients. Its financial products include long-term loans, short-term loans, bridge loans and debt refinancing provided through its corporate office in New Delhi and 17 field units across India.

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