REC gains after announcing early closure of tax-free bond issue

Rural Electrification Corporation rose 2.4% to Rs 196 at 12:05 IST on BSE after the company on Thursday, 12 September 2013, said it has decided the early closure of Tranche I of the tax free bonds issue on 16 September 2013.

The announcement was made after market hours on Thursday, 12 September 2013.

Meanwhile, the S&P BSE Sensex was up 28.53 points or 0.14% at 19,810.41.

On BSE, 92,000 shares were traded in the counter as against average daily volume of 2.55 lakh shares in the past one quarter.

The stock hit a high of Rs 197.60 and a low of Rs 189.60 so far during the day. The stock hit a 52-week high of Rs 267.50 on 4 January 2013. The stock hit a 52-week low of Rs 146.15 on 5 August 2013.

The stock had outperformed the market over the past one month till 12 September 2013, surging 13.25% compared with the Sensex's 4.41% rise. The scrip had, however, underperformed the market in past one quarter, declining 7.54% as against Sensex's 3.89% rise.

The large-cap company has equity capital of Rs 987.46 crore. Face value per share is Rs 10.

Rural Electrification Corporation (REC) said that the Bond Committee of the company at its meeting held on Thursday, 12 September 2013, has passed a resolution approving the issue and closure of Tranche-I secured redeemable non convertible bonds for an amount of Rs 1000 crore with an option to retain oversubscription upto Rs 2500 crore aggregating upto Rs 3500 crore on Monday, 16 September 2013.

REC proposes to raise upto Rs 5000 crore by way of issuance of bonds in one or more tranches in fiscal 2014.

REC's net profit surged 31.6% to Rs 1153.66 crore on 29.4% growth in total income to Rs 4001.38 crore in Q1 June 2013 over Q1 June 2012.

REC's main objective is to finance and promote rural electrification projects all over the country. The company provides financial assistance to state electricity boards, state government departments and rural electric cooperatives for rural electrification projects as are sponsored by them. The Government of India (GoI) owns 66.8% stake in REC (as per the shareholding pattern as on 30 June 2013).

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