REC to tap Japanese bond market by month-end

REC Chairman and Managing Director Vivek Kumar Dewangan

Power sector lender REC Limited will look to raise money from the Tokyo bond market, floating its first global yen bond by the end of this month, a senior executive said on November 1.

"We will be having roadshows in Tokyo, Hong Kong and London, and once that is completed we will launch the yen bonds, possibly by the end of this month," said the company's director, finance, Ajoy Choudhury. The state-controlled company plans to raise between $300 million and $500 million.

"Japanese rates are the lowest so that's why we are targeting that market and we are getting a good response. We are getting a Japanese rating done very soon. This is the first time we are approaching the Japanese yen bond market but otherwise we are raising term loans substantially," added Choudhury.

The comments came on the day the company, formerly called Rural Electrification Corporation of India, reported a profit of Rs 3,773 crore for the second quarter, up 38 percent from the previous year. The company claims it to be its highest-ever quarterly profit.

Its loan book increased 20 percent to Rs 4.74 lakh crore in the quarter ended September against Rs 3.94 lakh crore a year earlier.  "Signifying improving asset quality, the net credit-impaired assets have reduced to 0.96 percent with provision coverage ratio of 69.37 percent on NPA (bad loans) assets, as at 30th September 2023," the company said in a statement.

Roadmap for FY25 

"In the renewable energy sector, we are looking for hybrid solutions, maybe solar with wind or solar with storage. We are also looking for pump storage hydro projects," said Vivek Kumar Dewangan, REC chairman and managing director in a 'post-earnings' press conference.

So far, the company has signed memorandums of understanding worth Rs 2.86 lakh crore for green projects that include electrification of buses. The companies it has signed agreements with include Greencell Mobility, Adani Enterprises, JSW Energy and Hero Future Mobility.

"Of the Rs 2.86 lakh crore, the company has sanctioned Rs 40,000 crore for the green projects," Dewangan said.