State-run Rural Electrification Corporation (REC) Ltd, whose IPO has lighted up the otherwise gloomy capital markets with many a record, today fixed the price at Rs 105 per equity share – the top end of its price band.

The issue, which had a price band of Rs 90-Rs 105 got subscribed by 27.91 times with a maximum number of bids coming at the top end. The final tally shows that the QIB portion got subscribed by 39.3 times, HNI 27.12 times and Retail 7.68 times. The employee portion was also nearly subscribed 0.94 times.

The issue has received record number of bids for 430 crore shares against 15.61 crore shares on offer. Another record was that the IPO was fully subscribed within just 27 minutes of its opening on Tuesday.

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 power infrastructure funding 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 hit the market 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 yawning demand-supply 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 data shows that 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 Rs10,316,000 million.

Sourced From: Concept Public Relations India Pvt. Ltd

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