Rural Electrification Corporation OFS oversubscribed

The first central public sector enterprise disinvestment for the current fiscal year jump started with the Rural Electrification Corporation (REC) offer for sale (OFS) getting fully subscribed within one-and-a-half hours of the opening.

On offer was 5 percent paid-up capital of the company comprising 4,93,72,950 shares, each face valued at Rs. 10.

Of the shares offered for sale, 20 percent were reserved for retail investors comprising those who placed bids for shares of total value of not more than Rs. 2 lakhs. In addition, a five percent discount was also offered to retail investors on price bid.

"With this disinvestment, the government of India share in REC will come down to 60.64 percent", the union government said in a statement.

At the end of the day with total subscription of Rs.7,621 crore, the issue stood oversubscribed by 553 percent.

"The investor enthusiasm for the issue is borne out by the fact that the indicative price for retail was Rs.325.10 and for institutions Rs.324.73 both above the previous day's (Tuesday) closing price of Rs.321.65 and floor price of Rs. 315.

"Seldom, if ever, has such an upward spiral been registered by an OFS," the statement said.

The highlight of the issue has been the overwhelming retail investor participation, a record 902 percent oversubscription amounting to Rs. 2,887 crore.

"If we add retail bids through mutual funds then with Rs. 528 crore, the total amount subscribed by retail investors adds up to Rs. 3,415. The OFS has been equally strongly endorsed by the institutional investors. At Rs. 4,734 crore, it was oversubscribed by 466 percent, once again the highest ever for an OFS," it said.

The foreign institutional investors' participation stood at Rs. 1,692 crore or 20.71 percent of the subscribed amount.

-- Indo-Asian News Service

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