State-run power sector lender REC on Wednesday reported a 21 per cent y-o-y growth in its standalone net profit at ₹2,961crore during the April-June quarter of FY24 aided by the improving asset quality and effective cost management.

The company’s standalone total income rose by 16 per cent y-o-y to ₹10,964 crore.

REC’s Board approved the company’s proposal to raise up to ₹1.05 lakh crore for a period of one year from the date of approval by the shareholders in the upcoming annual general meeting.

Speaking on the company’s performance, REC Chairman and Managing Director Vivek Kumar Dewangan said that loan sanctioning and disbursements have been robust during the June quarter, which is almost at par with the performance in Q4 FY23. Traditionally, Q3 and Q4 are strong quarters for the company in terms of performance.

Asset quality

“Owing to the improving asset quality and effective cost management, REC is able to record its quarterly profit at ₹2,961 crore. As a result, the annualised Earnings Per Share (EPS) for Q1 FY24 stands at ₹44.96 per share against Rs 37.16 a share in Q1 FY23. Aided by growth in profits, REC’s net worth has grown to ₹60,886 crore as on June 30, 2023, an increase of 16 per cent y-o-y,” he added.

REC’s loan sanctioning rose 52 per cent y-o-y to ₹90,797 crore in Q1 FY24, of which the renewable energy (RE) sector accounted for 16 per cent share. Loan disbursements rose a whopping 174 per cent to ₹34,133 crore.

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The loan book has maintained its growth trajectory and has increased by 17 per cent y-o-y to ₹4.54-lakh crore. Due to improving asset quality, the net credit-impaired assets have reduced to 0.97 per cent with Provision Coverage Ratio of 70.46 per cent on NPA assets, as on June 30, 2023, REC said.

Indicating the ample opportunity to support the future growth, the Capital Adequacy Ratio (CRAR) of the company stands at a comfortable 27.60 per cent as on June 30, 2023.

The company has declared an interim dividend of ₹3 per share and the record date of payment of the interim dividend is August 14, 2023. REC board has recommended a final dividend of ₹4.25 per share for FY23, subject to approval by shareholders in the ensuing Annual General Meeting.

During the quarter, the company raised $750 million (around ₹6,135 crore) through green bonds under its Global Medium Term Note Programme.

Fundraise

The Board of Director of REC on Wednesday approved the proposal to raise funds through private placement of unsecured/ secured non-convertible bonds/ debentures of up to ₹1,05,000 crore, in one or more tranches, subject to approval of shareholders in this regard in the ensuing Annual General Meeting.

“The funds will be raised, from time to time, during a period of one year from the date of passing of resolution by the shareholders in the ensuing Annual General Meeting, with the approval of Competent Authority,” it added.

The Board also approved a proposal for increasing the borrowing limit from domestic and international markets.

“Proposal of increasing the overall borrowing limit of the company in Indian Rupees from ₹4,50,000 crore to ₹6,00,000 crore and in any foreign currency equivalent from $16 billion to $20 billion, notwithstanding that the moneys to be borrowed, together with the moneys already borrowed by the company and outstanding at any point of time (apart from temporary loan obtained from the company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the company and its free reserves,” it added.

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