Issue subscribed 27.5 times despite volatile market
• Bids for 4.3 billion equity shares received
MUMBAI, February 22, 2008: Generating a demand for over Rs 45,000 crores despite a highly volatile market condition, the IPO of the state-run Rural Electrification Corporation Limited (REC) got subscribed by 27.54 times by 6 PM today, the last day of the issue.
The issue has received bids for 430 crore shares against 15.61 crore shares on offer in the price band Rs 90-105 per share. The issue has created a record as it was fully subscribed within 27 minutes of the opening on Tuesday.
The IPO generated excellent response from across the board. The QIB portion was subscribed 40 times, HNI 23 times and retail 5.69 times. The employee portion was also fully subscribed demonstrating the interest it has generated.
The Issue constitutes approximately 18.18% of the fully diluted post-issue capital of REC. IL & FS Investsmart Securities Limited, ICICI Securities Limited and SBI Capital Markets Limited are the Book Running Lead Managers for the Issue.
The Company proposes to utilize the net proceeds from the fresh issue to augment its capital base to improve its borrowing capacity in order to support the future growth in its assets.
The IPO came as the government mandated REC and Power Finance Corporation (PFC) to mobilize funds to ensure that viable projects do not suffer for want of funds as the government has drawn up plans to bridge the demand-supply yawning gap in power sector.
The government’s Eleventh Plan (2008-2012) anticipates a substantial increase in the country’s power capacity. The Ministry of Power’s data shows that India’s power generation system, as on March 31, 2007, had a total installed capacity of 132,330 MW and an additional 78,577MW are required to meet the projected demand during the plan period. Thus, the overall fund requirement by 2012 for the sector has been estimated at a whopping Rs 10,316,000 million.
B N Kumar - 93210 48332/ 93200 48332
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