When It is By REC, The Future is Electric

Jitendra Srivastava, IAS, CMD, REC Ltd

In the heart of India’s rapidly evolving power and infrastructure landscape, REC Limited stands as a titan, driving the nation’s energy transition and infrastructure growth with unparalleled ambition. As a Maharatna Central Public Sector Enterprise under the Ministry of Power, REC has solidified its position as a cornerstone of India’s electrification and sustainable development goals. Recent developments, ranging from mega investment plans to leadership transitions, bond issuances, and strategic partnerships, underscore REC’s pivotal role in shaping India’s future. Under its new CMD Jitendra Srivastava, REC is destined to leverage its unique position in the power and infrastructure financing sector, to stay ahead as a standout performer in both financial markets and national development.

In April 2025, REC welcomed a new Chairman and Managing Director (CMD), Jitendra Srivastava, a 2000-batch Indian Administrative Service (IAS) officer from the Bihar cadre. Srivastava’s appointment, approved by the Appointments Committee of the Cabinet, marks a significant transition for REC as it diversifies its operations beyond traditional power financing into broader infrastructure projects.

Srivastava brings a wealth of experience from key administrative and leadership roles across sectors such as finance, power, education, public health, and infrastructure. Prior to joining REC, he served as Joint Secretary in the Department of Drinking Water and Sanitation under the Ministry of Jal Shakti, and held critical positions in Bihar’s Home Department and Public Health Engineering Department. 

His academic credentials, including a Bachelor of Arts (Honours) in Economics from Hansraj College, Delhi University, and an MBA in Finance from Cochin University of Science and Technology, equip him with the financial acumen and strategic vision needed to steer REC through its ambitious growth phase.

Srivastava’s appointment comes at a time when REC is expanding its footprint in renewable energy and infrastructure. His diverse experience positions him to navigate the complexities of financing large-scale projects while aligning with the government’s clean energy and infrastructure development goals. Srivastava is poised to lead REC into a new era of innovation and growth.

REC’s recent investment commitments reflect its bold vision to transform India’s infrastructure landscape. One of the most significant developments is REC’s recent Memorandum of Understanding (MoU) with the Mumbai Metropolitan Region Development Authority (MMRDA), signed during the India Global Forum Mumbai NXT 25 event in 2025.

This landmark agreement pledges Rs 1 lakh crore over the next five years to finance a wide range of infrastructure projects in the Mumbai Metropolitan Region (MMR). The MoU, executed by Harsh Baweja, Director (Finance) at REC, and Dr. Ankush R Nawale, Financial Advisor at MMRDA, focuses on urban mobility, affordable housing, and essential civic infrastructure. 

Maharashtra Chief Minister Devendra Fadnavis and other senior officials witnessed the signing, highlighting its importance to the region’s development. REC’s Rs 1 lakh crore commitment reflects their strong dedication to supporting large-scale infrastructure projects that will significantly improve the living standards for the people of Mumbai Metropolitan Region. 

This partnership also underscores REC’s growing role in urban transformation and sustainable development, beyond its original mandate which is reflected in its earlier name and branding, Rural Electrification Corporation.

Beyond Mumbai, REC has also signed an MoU with the Energy Management Centre (EMC), Government of Kerala, for Rs 18,360 crore in financing for pumped storage projects (PSPs) over the next five years. Signed during the Global Green Hydrogen & Renewable Energy Summit 2025, this agreement aligns with India’s renewable energy goals, particularly in enhancing energy storage to address the intermittency of solar and wind power. 

These investments demonstrate REC’s strategic focus on renewable energy infrastructure, a critical component of India’s commitment to achieving 50% non-fossil fuel-based energy capacity by 2030.

REC’s financing prowess extends to high-impact renewable energy projects, exemplified by its Rs 2,147 crore term loan agreement with Chenab Valley Power Project Limited (CVPPL) for the 1,000 MW Pakal Dul Hydro Electric Project in Jammu & Kashmir. 

Signed on February 11, 2025, this agreement supports the development of a project estimated to cost Rs 12,669 crore, located on the Marusadar River in Kishtwar district. The project is a cornerstone of India’s efforts to bolster renewable energy capacity and energy security in the region.

This follows REC’s earlier commitment of Rs 1,869.265 crore to CVPPL for the 624 MW Kiru Hydro Electric Project, also in Kishtwar. These agreements highlight REC’s critical role in financing hydropower, a renewable energy source that complements India’s solar and wind initiatives. 

By supporting such projects, REC is helping India harness its hydropower potential while fostering economic growth in strategically important regions like Jammu & Kashmir.

To fund its ambitious investment plans, REC has been actively tapping the bond market and expanding its borrowing program. In 2025, the company raised Rs 5,000 crore through two bond issuances - Rs 3,000 crore via five-year bonds at a 6.87% coupon rate and Rs 2,000 crore via 10-year bonds at a 6.86% coupon rate. 

These bonds, listed on the BSE and NSE, received an overwhelming response from investors, reflecting strong confidence in REC’s financial stability and growth prospects. Assigned “AAA” ratings by CARE Ratings, ICRA, and India Rating & Research, the bonds underscore REC’s low credit risk and high investor appeal.

In December 2024, REC had raised Rs 2,195 crore through bonds with tenures of 10 years and four months (Rs 1,620 crore at 7.10%) and 15 years (Rs 575 crore at 7.14%). These issuances demonstrate REC’s ability to secure cost-effective financing to support its expanding loan book.

Looking ahead, REC’s board has approved a revised borrowing plan of Rs 1.8 lakh crore for FY26, up from Rs 1.6 lakh crore. This includes Rs 1.55 lakh crore through domestic bonds, debentures, capital gains bonds, rupee term loans, and external commercial borrowings (ECBs), alongside Rs 10,000 crore in short-term loans and Rs 5,000 crore via commercial papers. 

The flexibility to interchange instruments ensures REC can adapt to market conditions and funding needs, positioning it to sustain its robust loan growth of 15-21% over recent quarters.

REC’s financial performance and strategic initiatives have earned it high praise from analysts. CLSA, a leading brokerage, maintains a “high-conviction outperform” rating on REC, citing its best-in-class loan growth, return on equity (ROE) of 19-20%, and an attractive dividend yield, which now stands around 4%. 

The brokerage highlights REC’s strong sanction pool, with 55% of sanctions from the past 2.75 years still undisbursed, primarily in generation, renewable, and infrastructure segments. This pool supports expectations of double-digit to mid-teen loan growth through FY 26-27.

CLSA also notes REC’s impeccable asset quality, with no slippages since FY22 and gross non-performing assets (NPAs) reduced to 2% as of December 2024, a significant improvement from a peak of 7.2% in the last bad cycle. The company’s cautious approach to financing, primarily targeting government-owned projects, further mitigates asset quality risks. 

Including CLSA, most analysts covering REC have “buy” ratings now. The company’s consistent dividend payouts - Rs 15.4 per share in FY25, including a fourth interim dividend of Rs 3.6 per share - further enhance its appeal to income-focused investors.

REC’s role in India’s power and infrastructure financing sector is unparalleled, driven by its status as a Maharatna company and its 20% market share in power sector financing. Unlike its parent, Power Finance Corporation (PFC), which focuses on large-scale power generation projects, REC specializes in transmission, distribution, and rural electrification, aligning with government initiatives to expand energy access in underserved areas. 

Of REC’s outstanding loans of Rs 5,65,621 crore, 88% are to state entities, with top states including Tamil Nadu, Telangana, and Maharashtra, while 33% of its portfolio is in infrastructure and logistics.

REC’s financing model addresses critical challenges in the renewable energy sector, such as intermittency, grid stability, and land acquisition. By providing long-term loans, bridge financing, and structured financial products, REC mitigates risks associated with high upfront costs and long gestation periods. 

Its support for projects like pumped storage and hydropower aligns with India’s goal of achieving 500 GW of non-fossil fuel-based capacity by 2030, as outlined by the Ministry of New and Renewable Energy.

REC’s parent, PFC, holds a 52.63% stake and is a leading NBFC focused on power generation and infrastructure financing. While PFC’s loan book is larger, REC’s specialized focus on rural electrification and transmission complements PFC’s strengths, creating synergies that enhance their combined impact on India’s power sector. 

The historical trend of external appointments for REC’s top management, including high-caliber professionals like Jitendra Srivastava to the CMD post, ensures fresh perspectives and robust leadership, distinguishing REC from many of its peers.

REC’s financial performance continues to be a proof of its resilience. For Q3 FY25, the company reported an 18.42% year-on-year revenue increase to Rs 14,272 crore and a 23.21% rise in net profit to Rs 4,076 crore. Its loan book growth, low NPAs, and high ROE position REC as a leader among NBFCs. 

The company’s ability to secure AAA-rated bonds and maintain investor confidence further bolsters its financial stability. Strategically, REC is diversifying into non-power infrastructure, as evidenced by its MMRDA partnership, while maintaining its core focus on renewable energy and rural electrification. 

The inauguration of a state-of-the-art Experience Centre in Gurugram recently, showcases REC’s contributions to the power and infrastructure sectors. Featuring digital displays and interactive exhibits, the centre serves as a knowledge hub, reinforcing REC’s commitment to innovation and transparency.

REC Limited is at the forefront of India’s energy and infrastructure transformation, leveraging its financial strength, strategic investments, and visionary leadership to drive sustainable growth. Under Jitendra Srivastava’s guidance, REC is poised to capitalize on its Rs 1.8 lakh crore borrowing plan, mega investment commitments, and robust loan agreements to power India’s renewable energy and infrastructure ambitions. 

With a stock that combines high dividend yields, strong fundamentals, and analyst confidence, REC remains an investment worth considering and a vital partner in India’s journey toward a cleaner, more connected and electric future. Since its IPO and listing in 2008, that is within 17 years, REC has grown investor wealth by more than 30 times.