A Maharatna power company saw its stock rise by 2 percent following the establishment of a new subsidiary in Madhya Pradesh. This move is aimed at facilitating renewable energy power evacuation, highlighting the firm’s focus on infrastructure development to support clean energy initiatives.
Price Movement
In Thursday’s trading session, REC Limited’s share price reached an intra-day high of Rs.516.80 per share, rising 2.5 percent from the previous close of Rs.507.40 apiece. Over the past five years, the shares have delivered over 400 percent returns.
What Happened
REC Limited, through its wholly-owned subsidiary Rajgarh III Power Transmission Limited, has taken a significant step towards strengthening renewable energy infrastructure.
Incorporated on December 24, 2024, with an authorized and paid-up capital of Rs.5,00,000 each, the subsidiary was established under a Gazette Notification issued by the Ministry of Power on December 12, 2024.
The company is responsible for managing the Transmission System to evacuate power from renewable energy projects in the 1,500 MW SEZ at Rajgarh, Madhya Pradesh (Phase III). RECPDCL, acting as the Bid Process Coordinator (BPC), will oversee the selection of a successful bidder through Tariff-Based Competitive Bidding (TBCB) guidelines.
Following this process, the subsidiary, along with its assets and liabilities, will be transferred to the selected bidder. Currently, the entity has no turnover as it is yet to commence operations.
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Capacity Enhancement
REC Limited is targeting to capture at least 20 percent of the total required investment for the renewable energy sector, which amounts to Rs.3 lakh crore. This investment is part of the effort to achieve 500 gigawatts of installed renewable energy capacity, with 300 gigawatts of additional capacity needed.
The estimated cost for this capacity expansion is around Rs.15 lakh crore, with further investments required for associated transmission lines through green energy corridors and storage solutions.
Financial Overview
Turning towards the financials of the company, REC Limited reported Q2 FY25 revenue of Rs.13,682 crore, up 17 percent from Rs.11,688 crore in the same quarter last year. Profit After Tax (PAT) increased by 7 percent to Rs.4,038 crore, compared to Rs.3,790 crore in the same period.
Company Profile
REC Limited, a Maharatna company under the Ministry of Power, Government of India, was founded in 1969. It specializes in offering financial support for power sector projects, including rural electrification. The company provides a range of financial products, including long-term, medium-term, and short-term loans to state electricity boards and private developers.
Written by – Siddesh S Raskar
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