REC FPO subscribed 7%, maximum bid at Rs 204 a share

State-run power project financier REC's follow-on-public offer (FPO) got subscribed seven per cent on the first day of offer today with majority of the bids coming in at the price of Rs 204.

The issue received bids for 1.21 crore shares against 17.17 crore shares on offer, thereby garnering a demand of 0.07 times the shares on offer till 1500 hrs, as per data available on the National Stock Exchange.

The issue received bids for 85.78 lakh shares at the price of Rs 204 a piece, while investors bid for 26.89 lakh shares at the floor price of Rs 203 and 9.28 lakh shares at Rs 210.

The company had fixed Rs 203 as the base price for its FPO, which would close on February 23. The floor price was fixed on Wednesday at a discount of 8 per cent over the prevailing market price.

Analysts were upbeat about the success of the FPO as they felt the pricing of the issue was attractive for institutional investors, although they expressed concern that retail demand might remain muted.

In the secondary market, shares of REC closed at Rs 213.70, down 0.26 per cent over previous close on the BSE.

"Rural Electrification Corporation (REC) has lot of support from government in many ways such as grants and interest rates subsidies which reduces the cost of projects funded. It has good track record and the only competition is PFC, which has identical valuations," Anand Rathi Securities said in a research note.