Cool debut for Rural Electrification Corporation

Rural Electrification Corporation was hovering at Rs 123.30 at 10:15 IST on BSE, a premium of 17.43% over the IPO price of Rs 105.

On BSE, 1.76 crore shares were traded in the scrip. It hit a high of Rs 128.40 and a low of Rs 120.05 so far during the day. The stock debuted at Rs 125, a premium of 19.04% over the IPO price.

The current price Rs 123.30 discounts the year ended March 2007 EPS of Rs 9 with a PE multiple of 10.57.

The company had fixed the issue price at the top end of the Rs 90 to Rs 105 price band.

The REC IPO ended on 22 February 2008 with 27.91 times subscription. The IPO received bids for 435.68 crore shares as against 15.61 crore shares on offer.

The qualified institutional buyers (QIBs) portion was subscribed 39.30 tomes, the non institutional investors portion was subscribed 27.11 times and the retail investors portion was subscribed 7.67 times.

REC, a term lending institution and a government enterprise, is engaged in the business of lending to power projects.

The company intends to use the issue proceeds for augmenting its capital base to meet future capital requirements arising out of its business growth and other general corporate purposes.

REC reported a net profit of Rs 775.03 on sales of Rs 2932.84 crore in the year ended March 2007.