Rural Electrification Corporation (REC) is one of the leading public Financial Institutions in Indian Power Infrastructure. REC is now entering into the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each. The issue closes on February 22, 2008 and the price band has been fixed at Rs 90 to Rs 105 per equity share of Rs 10 each.
Retail investors are right now scared to invest in new IPOs due to IPO withdrawals we have seen in recent past and poor performance of Reliance Power IPO. Rather as we said, it would be interesting to see the IPO listing of two new IPOs, KNR Constructions and OnMobile Global IPO.
Due to this turbulence in primary market, retail investors shall look at the reasonable price band REC IPO is offering and moreover there are good chances of REC IPO allotment in this situation.
"First six months of FY 08 seems to be quite good with topline at Rs 1,792 crore and PAT of Rs 523 crore, which results in an annualized EPS of Rs 13.40. Even on fully diluted equity of Rs 858.66 crore, this would be close to Rs 12.20. The present book value, as at 30-09-07, is at Rs 54, which would rise to Rs 63 to Rs 64, depending on the price discovery, post IPO. Post issue, the company’s market cap will be of Rs 7727.94 – 9015.93 crore."
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