Govt to divest 5% in REC

The government has set the ball rolling for its 2015-16 disinvestment programme. In a notice to BSE, the Centre has said it will divest five per cent stake in Rural Electrification Corporation (REC) through the offer for sale route on Wednesday. At current market rates, the disinvestment will help the government mop up over Rs 1,600 crore.

Shares of REC ended at Rs 335.60, down 0.5 per cent on Monday, valuing the company at Rs 33,139 crore.

The government will announce the base price for the stake sale on Tuesday. It has announced an additional five per cent discount for retail investors.

Following the stake sale, the government shareholding in REC will come down from 65.64 per cent to 61.64 per cent.

IL&FS Broking, JM Financial and Morgan Stanley are managing the share sale for the government.

REC will be the first company in which the government is divesting its stake as part of the 2015-16 disinvestment programme.

The Narendra Modi government plans to raise Rs 69,500 crore by selling stake in government companies during 2015-16. Around Rs 41,000 crore of this is expected to come through PSU disinvestment and another Rs 28,500 crore through strategic disinvestment.