REC gets a Gift City invite! RBI okays plan to set up subsidiary in financial hub
REC gets a Gift City invite! RBI okays plan to set up subsidiary in financial hub
State-owned REC has got RBI’s green light to set up a subsidiary in GIFT City, Gujarat. The proposed subsidiary will engage in a range of financial activities as a finance company within GIFT, including lending, investment, and other financial services, a company statement said.
According to the statement, REC Ltd, under the Ministry of Power and a leading NBFC, has received a No Objection Certificate (NOC) from the Reserve Bank of India (RBI) for setting up a subsidiary in Gujarat International Finance Tech-City (GIFT) in Gandhinagar, Gujarat.
The decision to expand operations into GIFT, a burgeoning hub for financial services in India, comes as REC continues to diversify its portfolio and explore new avenues for growth, it stated.
Vivek Kumar Dewangan, CMD, REC Ltd said in the statement, The GIFT City platform offers a conducive environment for international lending activities coupled with world-class infrastructure. We are confident that REC will harness these advantages to carve a niche for itself in the global market.”
CLSA has maintained a buy rating for REC after its strong quarterly performance. The brokerage has a revised target of Rs 595 instead of Rs 560 earlier. The brokerage suggests long-term investors to wait for a correction in the stock, which has already run up more than 22 per cent in a week.
CLSA sees a strong growth outlook for REC. Improvement in ratings has helped in credit costs. REC’s NPAs are expected to decline to 2 percent in FY2025, compared to 2.5 percent in FY24. It is already down from 3.4 percent in FY2023. The biggest driver for the stock is the buzz around the power sector itself.
REC has a direct play on the growing power demand.
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