Rural Electrification Corporation Limited (REC) FPO opens on Friday the 19th of February and closes on Tuesday the 23rd of February 2010. The issue is for a total of 17,17,32,000 equity shares comprising of a fresh issue of 12,87,99,000 shares and an offer for sale by the government of India of 4,29,33,000 shares. There would be a reservation of 3,50,000 equity shares for the employees of the company. The net issue of 17,13,82,000 would have a reservation of 50% for QIB’s who would bid through the French auction, 15% for Non-institutional investors and 35% for retail investors. NII and retail investors would be offered shares at the floor price.
The share price of REC has fallen from the high of Rs 274.50 registered on 19th of January 2010 to a closing price of Rs 229.5 yesterday on 10th of February 2010. This would be the second FPO after the disaster of NTPC and it is widely expected that the retail and non-institutional category would be offered a discount like was offered to the employees in the case of NTPC.
The share prices have fallen to Rs 225 on a day that the market is up. At the time of writing this article the BSESENSEX is trading at 16126 points, a gain of 204 points and REC is down 2.21% and trading at Rs 225.30.
Dear Arun,
Uptill the NTPC Issue,at least PSU offerings were looked upon with respect, as Investors knew it as a safe bet,and safe long term investment.I feel for short term investors the feeling of a”Safe Bet”may have gone by.GOI Companies will have to be processed/and looked into thouroughly by a “Messiah”like you,who feels and cares for Investors money.So Arun you will hae to go through this issue with Microscopic Eyes and give your”Sound Advise”to all classes of Investors.Market who were earlier alway positive for most GOI Issues come out earlier are now getting slowly into a negative zone.That means that these offerings are not as attractive as offerings issued ealier by GOI!!!So Dear Arun after getting Merchant Bankers and New Promoters to price their issue competitively,in such a way,that there is something left on the table,now you will have to take on the challenge,of making”The Mighty GOI”understand that,they to should not become so greedy and make their issues Investor Friendly.
Dear Arun,only you an send this message down to the right people/ears.Dear Arun,you will have to take this very important issue to New Delhi.