Rural Electrification Corp FPO likely by Feb

Follow-on public offer by Rural Electrification Corporation is likely to hit markets by February next year and the company will approach market regulator Sebi by mid-December in this regard, a top official of the firm said today.

"REC would file the Draft Red Herring Prospectus with Sebi by mid-December and the company plans to hit the market by February next year," REC Chairman and Managing Director Uma Shankar told reporters here.

The offer, comprising 15 per cent fresh equity and five per cent disinvestment by the government, would fetch around Rs 3,450.09 crore at the ruling market prices. The shares of REC were trading at Rs 200.90 on BSE in afternoon trade.

The government will ride a piggyback on 15 per cent fresh equity, Home Minister P Chidambaram had said while briefing reporters on government's decision to clear the proposal on REC's follow-on public offer last week.

When asked about the offer price, Chidambaram had said it would be decided by the Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee.     

After the FPO, the government's stake in the company would come down to 66.8 per cent from the current 81.82 per cent.     

REC finances and promotes rural electrification across the country.