Rural Electrification Corporation Limited. (REC) is infrastructure finance company in the power sector of India. It is a (PSU) Public Sector Undertaking which helps fund and promote rural electrification projects across India.
The market capitalisation of Rural Electrification Corporation Ltd. as on 5 July 2018 is a little over Rs.19,700 crore.
Company’s Wealth and Recent Performance
- REC recorded a fall in its standalone net profit by 36.72% at Rs.834.79 crore in the quarter ended March 2018 owing to lower revenues. The company’s total revenue in the Q4 FY 2017-18 March quarter was down to Rs.5,665.03 crore from Rs.5,980.58 crore a year ago. Meanwhile, the consolidated net profit of the company was at Rs.4,689.46 crore in 2017-18, down from Rs.6,313.37 crore in the previous fiscal.
- REC’s total income dipped to Rs.23,101.40 crore in 2017-18 as compared to Rs.24,361.23 crore in the previous fiscal. The company board declared the payment of final dividend of Rs.1.75 per share on the face value of Rs.10 each for 2017-18. The final dividend The final dividend was recommended in addition to the interim dividend of Rs.7.40 per equity share that was previously declared in February 2018. This makes the total dividend at Rs.9.15 per share, on the face value of Rs 10 each.
- In March 2018, REC raised $300 million which will be used for power sector development. On the occasion of World Environment Day. REC contributed $1 million to the International Solar Alliance (ISA) in order to promote sustainability through global collaboration.
Rural Electrification Corporation Ltd. Stock Trends in 2018
- On 1 January 2018, the opening price of Rural Electrification Corporation Ltd. as Rs.155 on NSE. It increased by 10 points in the first half of the month. However, it was back to the opening price at the end of the month. The company recorded a fixed date for interim dividend in the month of February. The scrip fell by over 15 points an ended the month at Rs.145.
- In March, the price of the REC stock continued to fall as the company launched $300 million dominated bonds. The opening price of the stock by the end of the month was Rs.126. Throughout the month of April, the scrip was flat and did not see any major fluctuations.
- The month of May did not see a surge in the price of the stock. In fact, it fell even further and ended the month at Rs.118. The downward trend of the stock price continued throughout the June. By the end of June 2018, the scrip was at Rs.101.
Rural Electrification Corporation Ltd. Stock Trends in 2016 and 2017
- On 1 January 2016, the opening price of the REC stock was Rs.113 on NSE. It was down by around 12 points by the first half of the month. By the end of January, the scrip had fallen to Rs.94. In the month of February, the stock price continued to fall and was down by 20 points by the first half of the month. The scrip gained some momentum in March and ended the month at Rs.83. In April, the price of the stock was pretty flat and did not witness any major fluctuations.
- In May, the scrip fell about 10-12 points at the company announced Q4 and FY 2016 financial results. The stock was flat throughout the month of June and ended the month at Rs.86. However, in July the scrip gained some momentum and crossed the Rs.100 mark in the first half of the month. By the end of the month, the scrip was at Rs.106. The month of August, witnessed a further increase in the price of the stock as it issued plans to release bonus. The scrip ended the month at Rs.113.
- In September, the scrip increased by over 15 points and was at Rs.125 as REC got shareholders nod to raise Rs.50,000 crore via NCDs. However, the price went down again and hit Rs.116 by the end of the month. In October, the scrip surged over 20 points and almost reached Rs.140. The month of November was pretty flat for the stock price as it stayed in the Rs.125-Rs.135 range. In December, the scrip lost some momentum and ended the month at Rs.123.
- On 1 January 2017, the price of Rural Electrification Corporation Ltd. stock was Rs.124 on NSE. By the first 15 days, the scrip had increased by 20 points to hit Rs.142. The stock ended the month at Rs.146. In February, the stock was pretty stable throughout the month. However, in the month of March, the scrip gained strength as it signed MoU with DVC to offer Rs.4650 crore in finance assistance. The opening price of REC stock at the end of March was Rs.180 which was a jump of 40 points. In April, the stock continued to increase and crossed the Rs.200 mark in less the first 15 days of the month. The scrip ended the month at Rs.204.
- The month of May saw a gradual increase in the stock price as the Board of the company recommended dividend. However, in June the price fell by over 20 points and ended the month at Rs.169. In July, the stock crossed Rs.180 but fell again by the end of the month. The month of August saw a gradual downfall in the price of the scrip by around 13 points. By the end of the month the opening price of the stock was Rs.168.
- In September, the scrip was flat and saw a marginal change in the price. The scrip gained over 20 points in October and ended the month at Rs.170. In November, the scrip fell by over 20 points. The stock price was pretty flat in the month of December and ended the month at Rs.154.
Should you invest in Rural Electrification Corporation Ltd?
- Rural Electrification Corporation Ltd. has recorded a lackluster performance in the FY 2017-18 with a double-digit decline in the profits. However, as the central and most state governments have successfully implemented the Ujwal Discom Assurance Yojana (UDAY), a remarkable improvement has been recorded in the financials of several stressed power distribution companies in the country. This could be one of the reasons that is projected to help REC report faster growth in 2018-19.
- The share price of REC has not seen any major drastic changes in the past couple of years. Investing in the stock of the company for a long-term could be a good option. However, it is strongly advised that you conduct enough research before investing your hard-earned money in stocks.
REC offers short, medium and long term loans. It also provides loans to purchase power via Indian energy exchange, bridge loans, loans for distribution and transmission projects, lease for equipments, and transitional finance loans. Furthermore, it offers financial assistance to private sector and state as well as central power utilities, state electricity boards, and other thanks to over 23 offices throughout India. It also offers services like equity financing and debt refinancing. REC is a Navratna Central PSU that comes under the under the Ministry of Power. The company funds its business by borrowing from different maturities in addition to foreign borrowings. It also garners funds from bonds and term loans. REC holds the some of the highest credit ratings from CARE. CRISIL, ICRA, and IRRPL. As per the company website, it has a net worth of Rs.33,326 crore. REC acts as the nodal agency for the implementation of Saubhagya (Pradhanmantri Sahaj Bijli Har Ghar Yojana) and DDUGJY (Deendayal Upadhyaya Gram Jyoti Yojana). Both the schemes focus on providing 24x7 affordable power to all households in the country.
History of the company
Rural Electrification Corporation Ltd was incorporated on July 25 1969. The company was declared as public financial institution in 1992. In 1998, REC was registered as a NBFC under section 45(IA) of the RBI Act. The company went public in 2007-2008 following which its shares were available for purchase via stock market.
Management of the company
Mr. Ramesh V Penumaka - Chairman and Managing Director
Ramesh V Penumaka has more than 33 years of leadership experience on national and international scale of government and corporate enterprises. He has worked Africa, Arab states, USA, Europe, across Asia-Pacific, and West Asia. Prior to joining REC Limited as the Chairman and MD, Ramesh was the Principal Finance Secretary / Additional Chief Secretary and Development Commissioner to Government of Andhra Pradesh for five years. He has technical expertise in the field of health systems strengthening, financial management, governance reform, infrastructure development, sustainable development, etc. He had provided strategic and operational support for effective execution of socio-economic development projects. Dr Ramesh is a physician with distinction in medicine and surgery from CMC Vellore, Tamil Nadu, India.
Listings in NSE, BSE, and Indices
The stock of Rural Electrification Corporation Ltd. is available for trading on the two major stock exchanges of India - The National Stock Exchange Limited (NSE) and Bombay Stock Exchange (BSE).
Sector: Term Lending Institutions
The company forms a part of important indices like:
- Nifty 100
- Nifty 200
- Nifty 500
- Nifty Next 50
- S&P BSE 200
- S&P BSE 500
- S&P BSE 100
- S&P BSE India Infrastructure
- S&P BSE Finance
Core- 4, SCOPE Complex,
7, Lodhi Road, CGO Complex,
Pragati Vihar, New Delhi, Delhi 110003
011 4309 1500
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