REC to raise $100 mln from Bank of Tokyo Mitsubishi

REC to raise $100 mln from Bank of Tokyo Mitsubishi

New Delhi: State-run lender Rural Electrification Corp plans to raise $100 million from Bank of Tokyo Mitsubishi, a top official said on Wednesday.

It is also looking to raise another $150 million in loans from foreign institutions, HD Khunteta, director of finance, told reporters.

“Foreign rates are at historical low levels, while domestic rates are high," Khunteta said, explaining the rationale.

REC has earlier raised $500 million from foreign players, and said it plans to raise Rs20 billion through sale of bonds, including Rs10 billion of infrastructure bonds by March.

India’s central bank has raised interest rates seven times in less than a year to tame stubborn inflation and is seen raising rates further.

REC may also raise its lending rates by 50 basis in the next 15 days to combat a tighter monetary policy, Khunteta said.

Earlier in the day, REC posted a 40% jump in profit for October-December, as the company held rates while its peers raised them, Khunteta said.

He added that the company expects disbursement to jump by a quarter in 2011/12 on rising loans demand from the power sector.

Shares in REC, valued at Rs257 billion by market capitalisation, closed down more than 5% at Rs246.65 in a weak Mumbai market.