REC Ltd Share Update: Fundraise Plan, Q4 Results & Dividend Drive Recent Momentum
REC Ltd (formerly Rural Electrification Corporation) shares have attracted investor attention in early June 2025 after a series of strategic corporate actions and strong quarterly results. Here’s a concise roundup of the key developments:
💰 ₹1.55 Lakh Crore Fundraise Plan & SPV Strike‑Off
On June 4, 2025, REC’s Board approved a massive ₹1.55 lakh crore fundraise to support its lending and investment business. At the same meeting, the company also resolved to strike off “Rajgarh III Power Transmission Ltd,” a now‑redundant SPV. Following these announcements, REC stock rose ~2.2% to ₹409.70 on June 5, 2025, reflecting improved market confidence in its balance‑sheet expansion strategy.
📊 Q4 FY25 Financial Highlights
- Total Income: ₹15,352 cr, up 22.4% YoY
- Operating Profit: ₹5,541 cr, up 8.1% YoY
- Profit After Tax: ₹4,310 cr, up 5.7% YoY
- Operating Margin: 36.1%, down from 41.8% last year (reflecting investment mix)
These results underscore REC’s ability to grow its loan book while maintaining healthy profitability amid rising interest‑rate pressures.
📈 Interim Dividend Announcement
Earlier in March 2025, REC declared its 4th interim dividend of ₹3.60 per share for FY25, rewarding shareholders ahead of the year-end results. This consistent dividend policy has helped support REC’s share price during periods of broader market volatility.
🛠️ Recent Price & Technical Trends
- After the fundraise news, shares traded in the ₹405–415 range, outperforming PSU-bank peers.
- Volume spiked 30% above the 30‑day average, indicating increased institutional interest.
- Technically, REC cleared its 50‑day moving average in mid‑May and is approaching the 200‑day level near ₹420.
🔍 Key Takeaways for Investors
- Balance Sheet Growth: The ₹1.55 lakh crore fundraise will support lending to state utilities and renewable projects, driving future interest income.
- Profitability Resilience: Q4 margins above 35% despite rising funding costs suggest effective liability management.
- Shareholder Returns: Regular interim dividends signal management’s commitment to capital allocation discipline.
- Valuation Consideration: At ~1.5× book value, REC trades at a premium to peers—investors should watch book‑value accretion and loan growth metrics.
⚠️ Risks to Monitor
- Interest‑Rate Environment: Further rate hikes could compress net interest margins.
- Asset Quality: REC’s exposure to stressed state‑owned utilities remains a credit risk.
- Execution of Fundraise: Timely placement of the ₹1.55 lakh crore must proceed without dilution to maintain investor confidence.
📚 Sources
- “REC shares rise 2% amid ₹1.55 lakh cr fundraise plans, SPV strike off” – Economic Times
- “REC Q4 results: Total income ₹15,351.88 cr; PAT ₹4,309.98 cr” – LiveMint
- “REC announces 4th interim dividend of ₹3.60 for FY25” – LiveMint
- REC Ltd. quarterly financials – Moneycontrol