Govt's REC To Raise <span Class='webrupee'>₹</span>1.20 Lakh Crore Via Debt Instruments In FY24

As per the regulatory filing, of the total, ₹1.05 lakh crore will be raised through domestic bonds, capital gains tax exemption bonds, rupee term loans, and external commercial borrowings. These bonds can be unsecured or secured and can be issued on a private or public placement basis.

Further, REC will raise ₹10,000 crore from short-term loans from banks, NBFCs or fintech, etc. This will be excluding temporary short-term loans which have tenures of less than 6 months, WCDL, CC Limit, OD Facility, corporate credit cards, or any other arrangement of similar nature.

Lastly, REC will raise ₹5,000 crore from commercial papers.

In its filing, REC said, "funds under the proposed borrowing programme for the financial year 2023-24 shall be raised for different maturities, through different instruments, depending upon the actual requirement of funds, asset-liability position, and prevailing market conditions."

On BSE, REC share price closed at ₹126.10 apiece up by 1.16%. The company's market cap is around ₹33,204.95 crore.

REC is a Maharatna company under the Ministry of Power. The company funds its business with market borrowings of various maturities, including bonds and term loans apart from foreign borrowings, on its own.

Backed by PFC, REC is leading financial assistance provider to the power sector in all segments, be it generation, transmission, or distribution.

Last month, Fitch Ratings assigned REC's proposed senior unsecured notes a rating of ‘BBB-’. Fitch said the proposed notes are rated in line with REC’s long-term issuer default rating on the basis that they will be issued under REC’s programme.

In December 2022 quarter, REC posted a 5.1% upside in net profit to ₹2,915 crore from ₹2,773 crore in the same quarter a year ago, due to trimming its total expenses. However, revenue plunged by 2.5% YoY to ₹9,782 crore. But REC's interest income on loan assets climbed by 1% YoY to ₹9,660 crore.