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REC mulls investment in equities

Looking to increase its revenues,REC is also looking at underwriting loans for power projects.

Written by Agencies | New Delhi |
July 3, 2011 3:51:23 pm

State-run Rural Electrification Corporation is planning to invest in equities that could offer returns of up to 30 per cent,as part of efforts to boost stakeholders’ value.

REC,which offers financing for power sector,is also looking at the possibility of having private equity fund to make investments in projects.

“We are framing the policies on PE fund and about making investments in equity.

“Investment in equity would be subject to approval of the board and we will make investment in only those companies where the return on equity is around 30 per cent,” REC Chairman and Managing Director H D Khunteta said.

He said that appreciation of the company’s investment would help in enhancing the value for stakeholders.

Looking to increase its revenues,REC is also looking at underwriting loans for power projects.

Stressing that the long term plan is to make REC a financial hub,Khunteta said,”We are planning to do the underwriting of loans to increase the fee-based income”.

REC recorded a profit of Rs 2,569.92 crore on revenues of Rs 8,256.91 crore in 2010-11. In the current fiscal,the company expects 15 to 20 per cent growth in revenue and profit.

Further,the firm is waiting for Reserve Bank of India guidelines to decide on floating a bank,either as a separate entity or a joint venture.

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