India's power lender REC IPO oversubscribed nearly 30 times
Monday, 25 February 2008

Agence France-Presse . Mumbai

Indian power sector lender REC's initial public offer to raise up to 415 million dollars was oversubscribed by nearly 30 times, data showed Friday, despite a weak share market.

State-run Rural Electrification Corp (REC) is involved in financing distribution and generation projects in India which needs more fuel to feed its booming economy.

The offering, which was oversubscribed 27.3 times, came two weeks after two large IPOs were withdrawn due to a tumble in India's share market.

India's benchmark Sensex share index has fallen more than 18 per cent from a record intra-day high of 21,206.77 on January 10.

'This (REC's) was a strong response considering choppy markets and events in previous weeks,' said a banker to the issue on condition of anonymity.

REC was expected to raise a maximum of 16.38 billion rupees (415 million dollars) at the top end of the price band which was set at 90 to 105 rupees.

The company plans to use the funds to increase capital and improve borrowing capacity for future expansion plans.

Earlier this month, Emaar MGF Land, an Indian joint venture of Dubai's Emaar Properties, pulled its IPO to raise up to 1.64 billion dollars, citing fears of a global financial 'meltdown.'

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