Understanding REC Limited: A Deep Dive into its History, Business Model, and Loan Portfolio

✨REC Limited is a government-owned company that focuses on financing and promoting rural electrification projects in India.

📈The stock price of REC Limited has risen by 163% in the last 7 months, attracting a lot of attention from investors.

💡REC Limited provides long-term loans to power generation, transmission, and distribution companies, as well as renewable energy resources companies.

💰The company's loan portfolio is mainly focused on state-related entities, but it has plans to diversify and lend to non-power infrastructure sectors.

🌐REC Limited has hedged its foreign borrowings to minimize risks associated with foreign currency fluctuations.

Why has REC Limited's stock price risen by 163% in the last 7 months?

—The rise in REC Limited's stock price can be attributed to various factors, including its focus on financing rural electrification projects, the demand for power infrastructure investments, and positive industry trends.

What is REC Limited's business model?

—REC Limited provides long-term loans to power generation, transmission, and distribution companies, as well as renewable energy resources companies. It also plans to expand its lending to non-power infrastructure sectors.

What is the loan portfolio of REC Limited?

—REC Limited's loan portfolio primarily consists of loans disbursed to state-related entities in the power sector. It aims to diversify its portfolio by lending to non-power infrastructure sectors as well.

How does REC Limited mitigate risks associated with foreign borrowings?

—REC Limited hedges its foreign borrowings to minimize risks associated with foreign currency fluctuations. This ensures a stable financial position and minimizes the impact of currency fluctuations on its operations.

What are the future plans of REC Limited?

—REC Limited intends to increase its loan book to 10 trillion rupees by 2030 and aims to achieve this target by 2027-2028. It also plans to expand its lending to non-power infrastructure sectors to diversify its portfolio.

00:00Introduction and purpose of the video: To discuss REC Limited, a stock that has seen a significant rise in its price.

01:21History of REC Limited and its focus on rural electrification projects in India.

02:39Understanding REC Limited's business model as a provider of long-term loans to power companies and renewable energy resources companies.

04:11Analysis of REC Limited's loan portfolio and its focus on state-related entities in the power sector.

06:25Discussion on the sources of REC Limited's borrowings and its provision coverage ratio.

08:37Insights into the status of REC Limited's stressed assets and their expected resolution.

10:03Analysis of the loan portfolio of REC Limited, including the distribution between state and private sector entities.

12:37Understanding the challenges faced by REC Limited, particularly related to generation companies in the private sector.

15:20Recent changes in REC Limited's business model, including its focus on non-power infrastructure sectors and hedging of foreign borrowings.

18:21Discussion on REC Limited's growth plans and targets for the future.

19:58Closing remarks and call-to-action for viewers to share their thoughts and suggest other stocks for future videos.