State-run power sector firm Rural Electrification Corporation (REC) has filed its DRHP with SEBI on 24th August 2007 for issue of 15.61 crore equity shares of Rs 10 each, at a price band to be determined later. The issue shall constitute 18.18 per cent of the fully diluted post-issue capital and 20% of the existing equity capital of REC. The IPO consists of a fresh issue of shares as well as offer for sale by the government.
The BRLM to the issue are ICICI Securities, IL&FS Investsmart and SBI Capital Markets and it is to be listed on the BSE and NSE.
The government currently owns 100% of Rural Electrification, which funds rural power projects in the country. It is engaged in financing and promotion of transmission, distribution and generation projects throughout India. Its schemes are aimed at extending and improving the supply of electricity and the energisation of agricultural pumpsets. REC approves and sanctions loans as the nodal agency for the Rajiv Gandhi Grameen Vidyutikaran Yojana aimed at the electrification of all villages in India.
The issue of REC is a part of the Govt's initiative taken, to give a boost to infrastructure development in the country, by raising funds via the PSU power sector companies to modernize and expand the various infrastructure facilities and resolve the current crunch which India is going through.
REC hopes to raise up to Rs 1,200 crore from the IPO and this is to be utilized to meet the company's future corporate requirements.
Post issue, the government's stake in REC will come down to 81.82%.
For the year ended 31/03/07, the company posted a total income of Rs.2840.57 crore and a PAT of Rs.683.06 crore. Its equity capital currently stands at Rs.780.60 crore.
Power Grid Corporation had filed its DRHP with SEBI on 18th April 2007 and its IPO is scheduled to now open on 10th September 2007. So based on this, REC's issue might take really some time to hit the markets.