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Shares of REC Ltd rose to 103 apiece on the BSE in Wednesday's opening deals as the stock started trading ex-bonus, a day ahead of its record date for the bonus shares issue which it had recommended in 1:3 ratio.

Public enterprise REC Limited, formerly Rural Electrification Corporation Limited, had announced that its board has recommended bonus shares issue in the ratio of 1:3 and also fixed the record date for the same which is next week on Thursday, August 18, 2022.

“The Board of Directors has recommended the issue of Bonus shares to the shareholders of the Company in the ratio of 1:3, i.e. one (1) bonus equity share of 10- each fully paid-up for every three (3) existing equity shares of 10- each fully paid- up to the eligible members, subject to the approval of shareholders through postal ballot," REC had informed in an exchange filing.

Last week, the company received shareholders' approval for the proposal to issue 65.83 crore bonus shares, utilising capital reserves of 658.3 crore. Bonus shares are fully paid additional shares issued by a company to its existing shareholders.

The company in an exchange filing said that “two resolutions as set out in the Postal Ballot Notice dated July 8, 2022, of the Company have been approved by the shareholders with requisite majority." The resolutions were the approval to appoint Vivek Kumar Dewangan as its Chairman and Managing Director and to capitalize the reserves and issue Bonus shares to the shareholders of the company.

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

State-owned REC Ltd posted an 8% increase in its consolidated net profit at 2,454 crore for the first quarter ended June 30, on the back of reduced expenses, as compared to 2,268.6 crore in the year-ago quarter. However, tts total income fell to 9,506 crore in the quarter under review from 9,555 crore year-on-year (YoY).

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