Issue Period: Feb 19 to Feb 22
Price Range: Rs.90 to Rs.105
Minimum Mkt Lot: 60 shares
Issue Size: Rs.1400 cr to Rs.1640 cr
Recommendation: Strong Subscribe
Expected Gains on Listing Day (in percentage terms): 15% to 35%
Expected Range of Listing Price: Rs.120 to Rs.145
Chances of winning Allotment: Strong (in Retail category)
Sector: Financial Services (power sector related)
Recommendation
The GOI's Eleventh Plan anticipates substantially increasing India's power capacity by the year 2012 & it is estimated that the implementation of the GOI's power sector plans will require overall funds of Rs.10,316 billion for investment in transmission, distribution & generation. REC Limited will be a prime beneficiary from the increased growth of, and investment into, the Indian power sector.
The business of REC Limited will stand to benefit from the increased growth of, and investment into, the Indian power sector. The issue of REC Limited is priced attractively in terms of valuations vis-a-vis its closest peer from the same space PFC. We recommend for a 'strong subscribe' to this IPO for Long-term investors. Short-term investors can expect modest-to-smart listing gains, even amidst current market volatility.
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