REC Ltd today announced the floor price at Rs 203 for its forthcoming follow on offer issue opening on Friday the 19th of February and closing on Tuesday the 23rd of February 2010. The floor price has been fixed at Rs 203 against the closing price of Rs 220.15 yesterday on the BSE. The floor price implies a discount of 7.79% to yesterday’s close.

The stock reacted adversely and hit a lot of Rs 205.15 but bounced back from there and after the first half hour of trade was trading at Rs 213, a loss of Rs 7.15 or 3.20%. The stock has recovered significantly from its lows.

Many people were expecting a discount on the floor price for retail investors but because the document filed with SEBI for the issue did not contain the provision, the same was not possible. The floor price therefore has given a discount to all categories of investors.

More on this issue over the weekend.