REC confident of IPO doing well

New Delhi, Feb 8 (UNI) Amidst global sell-off in equities on the concern that the US is headed for a recession and scrapping of listing plans by companies, Rural Electrification Corporation Ltd (REC) today said its Initial Public Offer (IPO) is 'above the water' and confident of a good response.

On the backdrop of Emaar MGF and Wockhardt Hospitals Ltd scrapping IPO plans, REC Chairman and Managing Director Anil Kumar Lakhina said ''we are not nervous but confident. Our fundamentals are strong coupled with our good track record and being a mini ratna company.'' REC will enter capital market on February 19 with a public issue of 15,61,20,000 shares through a 100 per cent book building process.

The price band of shares of face value Rs 10 each has been fixed at Rs 90-105 per share. The issue closes February 22.

The net issue to the public will be up to 15,22,17,000 shares constituting 18.18 per cent of the fully diluted post-issue capital of REC.

Power Secreatry Anil Razdan said ''at a troubled time like this, a strong and trusted player which has been in business since 1960s is needed.'' REC proposes to utilise the net proceeds to augment its capital base to meet the future capital requirements arising out of growth in its assets, primarily its loan and investment portfolio.

It is seeking top strengthen its capital base to improve its borrowing capacity in order to support the future growth in its assets.

Domestically, the company holds long-term borrowings ratings of AAA/stable from CRISIL, LAAA from ICRA and AAA(ind) from Fitch. Internationally it holds long-term borrowings ratings of BBB and Baa3 from Fitch and Moody's respectively.

President of India, acting through nominees from the Ministry of Power currently holds 100 per cent of the issued and paid up capital of the company. After the issue, Government of India's shareholding will be 81.82 per cent of the diluted post issue paid up capital.

IL&FS Investmart Securities, ICICI Securities and SBI Capital Markets are the book running lead managers to the issue.

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