Why is REC going for a massive borrowing program and how will it impact the stock price?
Answer
Answer
REC will borrow Rs.94,000 crore in FY20, and Rs.110,000 crore in FY21. The board has also approved the issue of Section 54EC bonds that are eligible for capital gains tax exemption on reinvestment of proceeds of sale in the said bonds. The company will look to raise funds through a mix of equity and debt from the domestic and from the international market. REC has been a dividend yield play.