Shares of state-run power financier REC Ltd hit the day’s high on July 1 after the firm reported strong business growth in the first quarter of 2024-2025. Around noon, the shares were up 3 percent, trading at Rs 541.00 apiece on NSE.
In a regulatory filing, REC noted that in Q1FY25, loan growth was very strong, driven by nearly 250 percent growth in renewables. The company recorded loan sanctions of Rs 12,747 crore and loan disbursements of Rs 43,652 crore during the first quarter ended June 30, 2024. This translates to significant growth of 24.17 percent and 27.89 percent, respectively, over the same quarter in the previous financial year.
REC’s stock has been gaining for the last five trading sessions following reports that the Ministry of Finance may propose some relaxation for finance companies from the Reserve Bank of India’s proposed strict project financing norms.
Earlier, in May, the Reserve Bank of India (RBI) proposed that lenders increase provisions for under-construction infrastructure projects and ensure strict monitoring for any emerging stress.
The RBI issued draft guidelines based on banks’ experiences with project financing. Starting in 2012-13, Indian banks faced large defaults on infrastructure loans due to exuberant lending, which strained the banking system.
