Staff ready to grab REC, NHPC offers

The recent stock market turmoil seems to have had little impact on the employees of two state-run power firms - Rural Electrification Corp (REC) and National Hydel Power Corporation (NHPC) - as they are waiting eagerly for the initial public offers of their companies.

Close to 95 per cent of staff at REC's headquarters in New Delhi, has already got a demat account, while most of them have deferred their other investment plans to save funds for the IPO, expected by mid-February. Employees of NHPC are also looking forward to subscribe to the company's shares whenever the public issue hits the market.

Though disappointed by the delay, NHPC employees are waiting eagerly for the IPO, a company spokesperson told PTI. The company had filed its draft prospectus months back, but it has not received the go-ahead from the market regulator as yet, and might have to file a fresh prospectus.

However, there is no disappointment in air at REC, a lending institution to power sector, and employees are upbeat about success of the IPO as well as their own participation.

REC is estimated to raise about Rs 1,200 crore through the IPO by offering 15.61 crore shares, which includes about 39 lakh shares reserved for the employees.

At least 40 of its middle-level and senior executives are planning to bid for shares worth the maximum permissible limit of Rs 25 lakh under the employee quota, when the public issue opens for subscription later this month, said a senior executive at the company here.

This would surpass the employee response in the previous two IPOs from public sector power companies "" Power Finance Corp (PFC) and PowerGrid (PGCIL), each of whom saw less than ten of their senior executives bidding for shares worth the maximum permissible limit of Rs 25 lakh.

At REC, which had 698 employees as on March 31, 2007, including 227 non-executives and 471 at executive levels, a large number of employees might bid for shares worth at least Rs 10 lakh.

"The company's track record of posting good profits make us confident of a secure future. We have withheld our investments since the reports surfaced about REC planning for an IPO. Most of us started preparations ever since the company filed its paper," said a senior-level employee at the company's finance and administration department here.

At least 40 executives at senior and mid-level positions plan to put in applications for the maximum limit of shares worth Rs 25 lakh, while Rs 10 lakh shares would be the minimum which most others would bid for, he said, adding that "this could have been bigger had the recent meltdown not happened".

Another employee in the company's accounts section said that some of his colleagues at junior and medium levels have even deferred other investment and expenditure plans. "All of us are waiting for an announcement. We have identified the sources, where the money would flow from," he noted.

"The excitement of taking part in the company's AGM has been one of the main reasons for me to open a demat account. I already have arranged Rs 10 lakh and will try to borrow more from other sources," said a 10th standard pass-out clerical staff working at REC's headquarters here.

Another mid-level executive in accounts section said he has started watching business news for at least two hours a day and surf the internet, especially the grey market sites, "where predictions are usually true".

As per grey market predictions, REC is a gem of a PSU for which the response would be even better than that of PFC and PGCIL, he added.