REC share sale subscribed more than five times; govt to get Rs1,500 crore

Following the disinvestment, the Centre’s stake in REC has come down to 60.64 per cent from the earlier 65.64 per cent.

In a more-than-optimistic start for the Centre’s disinvestment programme for 2015-16, the 5 per cent stake sale in state-owned Rural Electrification Corporation was subscribed more than five times and will raise Rs 1,550 crore.

With strong demand from institutional and retail investors, the offer-for-sale of 4.93 crore shares received 25.24 crore bids and was over subscribed 5.53 times, according to stock exchange data.

“At the end of the day with total subscription of Rs 7,621 crore, the issue stood oversubscribed by 553 per cent, the highest ever for an OFS,” said a finance ministry release. While the institutional category of 3.94 crore shares was over subscribed 4.66 times, the retail category of 98.74 lakh shares saw even stronger interest and was over subscribed 9.02 times.

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At the floor price of Rs 315 apiece, the government would raise over Rs 1,550 crore from the share sale.

“The stock is reasonably priced and the outlook for REC has been improving on the back of huge funding expected in the power sector as well as planned reforms in the sector,” said Vaibhav Agrawal, vice president, research at Angel Broking.

Following the disinvestment, the Centre’s stake in REC has come down to 60.64 per cent from the earlier 65.64 per cent.

On Wednesday, the power PSU’s scrip closed at Rs 330.05 a piece on the Bombay Stock Exchange, gaining 2.61 per cent over Tuesday’s closing price.