REC Ltd.

State-run, Rural Electrification Corp (REC) has received the Finance Ministry’s approval to raise Rs 3,000 crore through issue of tax-free bonds this fiscal. The company has been authorized to issue, through a public issue, during the financial year 2011-12, tax-free, secured, redeemable, non-convertible bonds of Rs 1,000 each, aggregating to Rs 3,000 crore.

The interest rate on the bonds will not be less than 50 basis points below the yields on Government Securities (G-secs). However, a higher coupon rate of up to 20 basis points may be offered to retail individual investor vis-a-vis the rate offered to Qualified Institutional Buyers [QIBs], corporate and High Networth Individuals. Tenure of the bonds could be 10 or 15 years.

The company had planned to mop up to Rs 28,000 crore this fiscal and so far, about Rs 23,000 crore has been raised.

REC is engaged in providing financial assistance to state electricity boards, state government departments and rural electric co-operatives for rural electrification projects as are sponsored by them.