REC Ltd’s Board Sets ₹1.6 Lakh Crore Borrowing Limit for FY 2024-25

On March 27, 2024, State-owned REC Ltd informed in an exchange filing that the company’s board had approved an overall borrowing limit of ₹1,60,000 crore for 2024-25.

Breakdown of Borrowing Limit

On Wednesday, REC Ltd’s board held a meeting and approved a borrowing limit of ₹1.6 lakh crore, which includes ₹1,45,000 bonds and term loans, ₹5000 crore of short-term loans and ₹10,000 crore of commercial papers.

Regarding the bonds and term loans, the company stated a list of various domestic bonds and debentures, from infrastructure to green bonds, permitted by regulatory authorities, available in various structures and placements. For bonds and term loans, the borrowing limit is ₹1,45,000. In the case of short-term loans, the borrowing limit is ₹5000 crore. The company further added Short Term Loan (STL) from Banks/FIs/NBFCs, etc. (excluding 5,000 temporary loans, i.e. STL of tenure less than 6 months, WCDL, CC Limit, OD Facility or any other arrangement of similar nature).

REC Ltd also stated, “Funds under the proposed borrowing programme for 2024-25 shall be raised for different maturities, through different instruments, depending upon the actual requirement of funds, asset-liability position and prevailing market conditions, with the approval of Competent Authority.”

They mentioned in the exchange filing that the company’s Board had approved the amendment in ‘Policy on Criteria for determining Materiality of Events or Information for disclosure to Stock Exchanges’.

On March 28, 2024, the share price of REC Ltd opened at ₹446.00, touching the day’s high at ₹455.60, as of 10:53 AM on the NSE.

About REC Limited

REC is a Maharatna company that comes under the administrative control of the Ministry of Power, Government of India. The company is registered with RBI as a Non-Banking Finance Company (NBFC), Infrastructure Financing Company (IFC) and Public Financial Institution (PFI). REC offers long-term loans and various other financing products to central, state and Private Companies to create infrastructure assets in the country.

As of December 31, 2023, REC Ltd had a loan book of ₹4.97 lakh crore, with 90% loans to the state sector. The net worth of the company stood at ₹64,787 crore.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.