Thursday, February 7, 2008

REC IPO - Analysis

Rural Electrification Corporation (REC), one of the leading public financial institutions in Indian power infrastructure, proposes to enter the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each through 100% book building process.

REC is one of the leading public financial institutions in Indian power infrastructure, engaged in the financing and promotion of transmission, distribution and generation projects throughout India. It occupies a key position in the GoI's plans for the growth of the Indian power sector.

The company proposes to utilize the net proceeds from the fresh issue to augment its capital base to meet the future capital requirements arising out of growth in its assets, primarily its loan and investment portfolio due to the growth of the Indian economy and for other general corporate purposes including meeting the expenses of the Issue.

The issue closes on February 22, 2008 and the price band has been fixed at Rs 90 to Rs 105 per equity share of Rs 10 each.

This would be a good IPO to invest as it is a great company, the price band is reasonable and there are good chances of allotment in the current situation.

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