REC OFS date 08th April 15

I think much depends on the personality of the investor and what options he has. On the one hand, there is no doubt that REC would make for a safe, blue chip, long-term investment. It is a niche power sector financier and will be a prime beneficiary of the ongoing reforms drive of the Government. Also, its valuations at 1x FY17E P/BV are inexpensive and attractive.

However, at the same time, there are options available in the private sector financing space. These are "riskier" and more expensive but may offer better returns than a PSU.

So, one should evaluate what options he has for his money and then take a decision.

 

The reasons for REC's low valuations

At 6.2 times its trailing 12 months price-to-earnings (P-E) multiple, Rural Electrification Corp. Ltd (REC) is one of the cheapest stocks in the infrastructure financing industry. Growth has been decent. The company’s loan book grew by 16-18% in the first three quarters of 2014-15. Net interest income increased in the range of 17-23%. But the stock has underperformed the broader markets since the beginning of this calendar year.

....

Read more at: https://www.livemint.com/Money/1DRcKDs7DVWjWSXvGmq5aI/The-reasons-for-RECs-low-valuations.html

 

Re: REC OFS Note By IIFL

REC Ltd: Attractive Risk-Reward – BUY
OFS Floor Price Rs315, Target Rs392, Upside 24%
*Retail to get 5% discount on issue price

Rural Electrification Corporation (REC), a niche power sector financier, would be a prime beneficiary of the ongoing power sector reforms which over a period of time would enhance economic efficiency across the value chain and kick start the stalled investment cycle. While financial viability of SEBs is improving through the restructuring package under implementation, steps taken by the current government towards augmenting fuel supply is encouraging. REC’s competitive position remains strong in the power financing space supported by its nodal agency status, ability to lend for longer tenures versus banks and benefit of lower funding cost due to Government’s support.

(Login to download report)

 

LOL! I don't think advice was given not to invest - only that there may be better opportunities available. No one can dispute that there will be better opportunities available for almost any investment proposal

 

REC share sale, subscribed over 5.5 times, earns Rs1,550 crore

https://www.livemint.com/Money/fg1qPsVWsYt9XK4yQfgCcJ/REC-share-sale-gets-fully-subscribed-on-institutional-demand.html