Detailed Report:
REC Limited has officially informed the National Stock Exchange of India Limited and BSE Limited about the incorporation of a new wholly owned subsidiary named Velgaon Power Transmission Limited. This notification was made on March 31, 2025, in compliance with Regulation 30 read with Schedule III of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.
The new entity, Velgaon Power Transmission Limited (CIN: U42202DL2025GOI445416), has been established as a wholly owned subsidiary of REC Power Development and Consultancy Limited (RECPDCL), which itself is a wholly owned subsidiary of REC Limited. According to the provisions of Section 2(87) of the Companies Act, 2013, this makes the new company a subsidiary of REC Limited as well.
The incorporation comes following an order from the Government of Maharashtra dated February 12, 2025, which allocated an intra-state transmission project to RECPDCL. In this project, RECPDCL has been appointed as the Bid Process Coordinator (BPC) for selecting a bidder for the establishment of a 400/200 kV Velgaon GIS Substation. The new company was incorporated on March 29, 2025, with the Certificate of Incorporation received on March 30, 2025.
Key Points of the Announcement
📊 Company Details:
- Name: Velgaon Power Transmission Limited
- Authorized Capital: ₹5,00,000/-
- Paid-up Capital: ₹5,00,000/-
- Incorporation Date: March 29, 2025
- CIN: U42202DL2025GOI445416
⚡ Project Overview:
- Establishment of 400/200 kV Velgaon S/Stn(GIS)
- Intra-state transmission project allocated by Government of Maharashtra
- RECPDCL appointed as Bid Process Coordinator
🔄 Business Model:
- After selection of successful bidder through Tariff Based Competitive Bidding (TBCB)
- Company will be transferred to successful bidder along with all assets & liabilities
💼 Ownership Structure:
- 100% owned by RECPDCL (a wholly owned subsidiary of REC Limited)
- Considered a related party of REC Limited
- No interest from promoters/promoter groups except to the extent of shareholding
🏛️ Regulatory Approvals:
- Incorporated pursuant to Government of Maharashtra order dated February 12, 2025
Potential Market Impact
The incorporation of Velgaon Power Transmission Limited is likely to have a marginally positive impact on REC Limited’s share price in the short term. This development indicates REC’s continued expansion in the power transmission sector through its subsidiary RECPDCL.
Investors might view this positively as:
- It demonstrates REC’s growing role in facilitating power infrastructure development
- It shows the company’s ability to secure government projects
- The business model of transferring the company to successful bidders after selection minimizes long-term risk exposure
However, given the relatively small size of the initial capitalization (₹5,00,000/-), the immediate financial impact on REC Limited is expected to be minimal. The long-term value will depend on the successful completion of the bidding process and subsequent project implementation.
About REC Limited
REC Limited (formerly Rural Electrification Corporation Limited) is a Navratna company under the Ministry of Power, Government of India. It is a leading financial institution focused on financing and promoting power sector projects throughout India.
Key features of REC Limited:
- Established to enhance rural electrification infrastructure
- Now expanded to comprehensive power sector financing
- Plays a crucial role in the government’s power sector initiatives
- RECPDCL, its subsidiary, specializes in acting as Bid Process Coordinator for transmission projects
- Significant player in both inter-state and intra-state transmission projects
📉 Stock Market Disclaimer
Disclaimer: This post is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy/sell any stock or share. Investing in the stock market involves risk. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial advisor before making investment decisions.
