The government’s ambitious divestment programme for the current fiscal began on a strong note today, with the sale of 5% stake in state-run Rural Electrification Corporation (REC) getting subscribed over five times, fetching an estimated Rs 1,550 crore to the exchequer.
On strong institutional and retail demand, bids were received for over 25.24 crore shares as against 4.93 crore shares on offer, resulting in over-subscription of 5.11 times.
At the floor price of Rs 315 apiece, the government would raise over Rs 1,550 crore from the Offer For Sale (OFS).
The share sale received strong response from retail and institutional investors and was fully subscribed within an hour of its opening.
The portion reserved for retail investors, who are also getting a 5% discount, was subscribed 8.81 times, as per the stock exchange data. The general category portion was over-subscribed 4.19 times.
As against a floor price of Rs 315 a share for the OFS, REC shares closed at Rs 330.05, up 2.61% over previous close. Government holds 65.64% stake in REC.
As much as 20% of the offer size was reserved for retail investors, who can bid for shares worth Rs 2 lakh. Besides, 25% of the offer would be allotted to mutual funds and insurance companies.
REC is the first PSU to hit the market in the current fiscal. The government has budgeted to raise Rs 41,000 crore through minority stake sale in 2015-16. — PTI
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