REC, NHPC IPO to come out by March '08

New Delhi, Sept 11 (UNI) The government today said the Initial Public Offering (IPO) of Rural Electrification Corporation (REC) and National Hydroelectric Power Corporation (NHPC) is likely to come out by the end of this fiscal and it will soon appoint independent directors on the board of these two companies.

''We have moved the file to the Cabinet for appointing independent directors on the board of REC and NHPC. The IPO is likely to hit the market by March 2008,'' Power Minister Sushilkumar Shinde told reporters on the sidelines of a conference.

The public sector undertakings, which had filed draft prospectus for IPOs in April and August respectively, are in the final process of selection of independent directors to comply with the Clause-49 norms of Companies Act, 1956.

Clause-49 of the listing agreement came into effect from December 1, 2006. Under this rule, it is mandatory for companies to have 50 per cent of their board members to be independent directors, if these companies have an executive chairman (as in the case of PSUs).

If companies have non-executive chairman, the number of independent directors can be lower at one-third.

The IPO by Power Finance Company (PFC), which was the first PSU to hit the market after the Clause-49 rule came into effect, was delayed by nearly nine months due to a delay appointing independent directors.

After the proposed IPOs, the government share in REC would come down to 81.22 per cent, while in NHPC it would be 86.36 per cent.

The companies are currently fully-owned by the government.

UNI