Shares of REC Ltd surged by 12% on June 3, reaching a new high of Rs 602.75 on the NSE. This jump came after REC’s board approved raising Rs 1.45 lakh crore through non-convertible debentures (NCDs).
Key Points:
- REC’s Plans: REC, a government-owned finance company, funds projects in power and non-power sectors like roads and metro systems. They plan to raise funds through unsecured/secured NCDs worth Rs 1.45 lakh crore. Harsh Baweja has been appointed as the new CFO and director of finance.
- PFC’s Performance: Another PSU financier, Power Finance Corporation (PFC), also saw its shares rise 12%, hitting a record high of Rs 557.95 on the NSE.
What’s Driving the Rally?
- Exit Polls: The surge in stock prices is linked to exit polls predicting a big win for the NDA government. Analysts believe this will lead to political stability and policy continuity, benefiting public sector units (PSUs).
- Economic Agenda: Stocks tied to the government’s economic plans, particularly in capital expenditure and PSUs, have been performing well and are expected to continue this trend if the BJP retains power.
Sector Growth:
- Power Demand: The power sector, including generators, distributors, and financing firms, has seen significant growth. REC and PFC shares have increased by 315% and 255% respectively over the past year.
- Government Initiatives: Programs like the Renewable Energy Development and Solar Scheme (RDSS) and LPS schemes are driving funding opportunities in the power sector. There’s strong potential for renewable energy projects and infrastructure credit uptake.
Additional Gains:
- IREDA: Shares of Indian Renewable Energy Development Agency (IREDA) also rose by around 4% during intraday trading.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
