REC FPO subscribed more than 2 times

A large number of bids at Rs 205 per share

The follow-on public offer (FPO) of state-run Rural Electrification Corporation (REC) was subscribed more than two times by 15:00 IST on the last day of the bidding for the issue today, 23 February 2010. Bids under the Fresh Auction method for the FPO are at prices ranging from Rs 204 to Rs 215, with a large portion of the bids at Rs 205. The floor price for the issue is Rs 203.

The follow-on public issue of 17.17-crore equity shares comprises fresh issue of 12.88-crore equity shares and offer for sale of 4.29-crore equity shares to carry out disinvestment of Government of India's stake. The company intends to utilize the funds being raised through the fresh issue to augment its capital base to meet future capital requirements arising out of growth in its business.

Category-wise data shows that foreign funds had put in bids for 3.24 crore shares by the end of the second day of the issue on Monday, 22 February 2010. Mutual funds had put in bid for 1.01 crore shares. Domestic institutional investors other than mutual funds, put in bids for 5.08 crore shares. A total of 8.56 crore shares have been reserved for the qualified institutional buyers (QIB) category.

REC is a public financial institution in the Indian power infrastructure sector engaged in the financing and promotion of transmission, distribution and generation projects throughout India. REC's clients primarily include Indian public sector power utilities at the central and state levels and private sector power utilities. REC's primary financial product is project-based long-term loans. It funds its business with market borrowings of various maturities, including bonds and term loans.