Rural Electrification Corporation IPO details are as mentioned below:-
Issue opens : February 19, 2008
Issue Closes February 22, 2008
Price Band : Rs.90/- to Rs.105/-
Bid Lot : 60 shares into multiple of 60 shares
Issue Size : 1405 crs – 1639 crs
I dont have any recommendations as markets are still too choppy and it is better to wait and decide based on subscriptions.
In valuation terms it seems reasonable, and on fully diluted equity of Rs.858.66 crores, EPS would be close to Rs.12.20. Read Tulsian for more.
One can however subscribe for moderate listing gain.
The words Rural electricity and subsidy go together. Even though this company does not directly deal with power distribution in any way, however in the longer term everything depends upon government policy. Worse govt cos ( Politician Slave Units) especially in the energy space haven’t made much money for retail investors in the longer term as proven in the recent past by stocks like ongc gail hp and bp and Power sector valuations now falling on a daily basis even though as Ankur correctly pointed out – this is a Non Banking Finance Company, which derives income from Power sector financing, like Power Finance Corporation Ltd.