REC to launch FPO by February

The follow-on public issue of the power sector financier, Rural Electrification Corporation (REC), is likely to hit the market by February next year.

“We will file the Draft Red Herring Prospectus (DRHP) with the market regulator, Sebi, by mid-December. The FPO should be announced in February, hopefully,” said P Uma Shankar, chairman and managing director.

At the current market price, the offer, comprising 15 per cent fresh equity and 5 per cent disinvestment by the government, could fetch the company around Rs 3,500 crore.

After the FPO, cleared by the Union cabinet last week, the government's shareholding in the company would come down to 66.8 per cent from 81.82 per cent at present.

REC’s disbursements to power projects stood at over Rs 92,000 crore by the end of March 2009. For the half-year ended September this financial year, the company's disbursements were up 22 per cent at Rs 9,122 crore, compared with the same period last year.