The floor price of Rs 315 a share is at a discount of 2.07 per cent over the closing price of Rs 321.65 a share.
The price for the offer for sale (OFS) of 4.93 crore REC shares was decided today at a meeting headed by Finance Minister Arun Jaitley.
The Floor Price of the Offer will be Rs 315 per equity share, the company said in a filing to the BSE.
REC scrip closed at Rs 335.60, down 4.16 per cent on the BSE. The 5 per cent share sale would fetch over Rs 1,552 crore to the exchequer.
As much as 20 per cent of the offer size would be reserved for retail investors, who can bid for shares worth Rs 2 lakh. They would be offered shares at 5 per cent discount to issue price.
Besides, 25 per cent of the offer would be alloted to mutual funds and insurance companies.
The disinvestment department has a pipeline of companies to sell minority stake to avoid bunching up of disinvestment towards the end of end of the fiscal.
The companies which have been lined up for disinvestment include BHEL, Dredging Corporation, NALCO, IOC and NMDC.
"It is not very healthy to bunch stocks towards the end of fiscal because then you cannot watch the market and there is limited depth in market. So one may not get the full worth also. We will not bunching them together," Disinvestment Secretary Aradhana Johri had said earlier.
In 2014-15, government had raised about Rs 24,500 crore through disinvestment.