The recent stock market turmoil seems to have had little impact on the employees of two state-run power firms, Rural Electrification Corp. Ltd (REC) and National Hydroelectric Power Corp. Ltd (NHPC), who are waiting eagerly for the launch of their companies’ initial public offerings (IPO).
At the New Delhi headquarters of REC, close to 95% of staff has already got a demat account, while most of them have deferred their other investment plans to save funds for the IPO, expected to hit the market by mid-February.
“All of us are waiting for an announcement,” said an employee of the company’s accounts division.“We have identified the sources where the money would flow from,” he added.
The excitement of taking part in the company’s annual general meeting has been one of the prime reasons for an REC clerk, a 10th-grade graduate, to open a demat account. “I already have arranged for Rs10 lakh and will try to borrow more from other sources,” he said. Another mid-level executive in the accounts section said he has started watching business news for at least two hours a day and surfing the Internet, especially the grey market sites, “where predictions are usually true.”
In addition, at REC, which had 698 employees as on 31 March 2007—227 non-executives and 471 executive-level employees—a majority of employees are expected to bid for shares worth at least Rs10 lakh.
“The company’s track record of posting good profits make us confident of a secured future,” said a senior-level employee at the company’s finance and administration department.
“We have withheld our investments since the reports surfaced about REC planning an IPO. Most of us started preparations ever since the company filed its draft red herring prospectus.”
At least 40 executives at senior- and mid-level positions plan to put in applications for the maximum limit of shares, worth Rs25 lakh, while Rs10 lakh shares would be the minimum that most others would bid for, he said, adding that “this could have been bigger had the recent meltdown not happened.”