Mumbai: State-owned Rural Electrification Corp. Ltd (REC) is seeking government approval to raise Rs2,500-3,000 crore through a stake sale.
REC is one of the two largest lending organizations in the Indian power sector.
People close to the development said the company has sent a letter to the power ministry seeking its consent for the stake sale.
REC is likely to offer up to 170 million shares, or nearly 20% of the company’s current equity, these people said on condition of anonymity.
They said the company may go in for a follow-on public offer or qualified institutional placement (QIP) to raise capital.
Currently, the government owns 81.8% stake in REC. After the follow-on public issue or QIP, the government’s stake in the company would come down to about 67%, they said.
REC plans to use the capital raised to disburse loans to power projects. The company has already sanctioned loans worth Rs10,000 crore in the current fiscal year to 31 March.