REC shares hit all-time of Rs 285.80 on the BSE; here is why
REC share price NSE BSE: The stock jumped after the company said that the Board of Directors of the Company has approved the sale and transfer of the entire shareholding of Ramgarh-II Transmission Limited to Power Grid.
REC share price NSE BSE: Shares of REC Ltd, a Navratna company under the administrative control of the Ministry of Power, rallied as much as 6.92 per cent to hit an all-time high of Rs 285.80 apiece on the BSE during the fag-end of the session on Wednesday, September 27. The stock eventually ended at Rs 284.15 on the BSE, up 6.30 per cent.
The stock jumped after the company, in its regulatory filing, said that the Board of Directors of the Company, in its meeting held on September 27, 2023, inter alia, approved the sale and transfer of the entire shareholding of Ramgarh-II Transmission Limited, presently held by REC Power Development and Consultancy Limited (RECPDCL), a wholly-owned subsidiary of REC, to M/s Power Grid Corporation of India Limited.
The company further said that the process for the sale and transfer of the said special purpose vehicle (SPV) to the successful bidder(s) (Power Grid) is expected to be completed during the financial year 2023–24.
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REC Ltd is registered with RBI as a non-banking finance company (NBFC), Public Financial Institution (PFI) and Infrastructure Financing Company (IFC). It was incorporated in 1969 in the backdrop of severe drought and famine in the country, to energise agricultural pump-sets for irrigation purposes, thereby reducing the dependency of agriculture on monsoons. Since then, the entity has evolved and expanded its financing mandate to cover the entire Power-Infrastructure sector comprising Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc., as per the company's website.
On Tuesday (September 26), REC Limited signed an MoU with Punjab National Bank (PNB) to jointly explore the possibility of funding the Power Sector and Infrastructure and logistics Sector projects under the consortium arrangement. REC and PNB will associate with each other to co-finance loans amounting to Rs 55,000 crore over the next three years.
"REC Limited, a Maharatna CPSE established in 1969, under the Ministry of Power, provides long-term loans and other finance products for the Power-Infrastructure sector comprising of Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc," the press release said.
More recently REC has also diversified into the Non-Power Infrastructure sector comprising Roads and expressways, Metro Rail, Airports, IT Communication, Social and commercial Infrastructure (Educational Institutions, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel, Refinery, etc. The loan book of REC exceeds Rs 4,54,393 Crore, the release added.