Rs 55,000 crore impetus: These multibagger PSUs sign MoU to co-finance infrastructure project
Interestingly, both the stocks have delivered multibagger returns in the last one year.
In a tumultuous day for the stock market, where benchmark indices were draped in red, two standout stars emerged, gleaming brightly against the backdrop of chaos: REC Ltd and PNB. REC Ltd surged by an impressive 6 per cent, trading near its daily high, while PNB recorded a commendable 2 per cent uptick during Wednesday's trading session. The question that naturally arises is, what propelled these two stocks skyward amidst the market's downward trend?
The answer lies in a strategic move that promises to shape the future of both REC Ltd and PNB. These companies have come together through a Memorandum of Understanding (MoU) that aims to delve into the exciting realm of financing projects within the Power Sector and Infrastructure & Logistics Sector, all under a consortium arrangement. This partnership signifies a commitment to co-finance loans amounting to a staggering Rs. 55,000 crores over the course of the next three years.
The signing ceremony for this momentous agreement took place on September 26, 2023, in Gurugram. Executive Director (Infra & Logistics) of REC, Shri T.S.C Bosh, and CGM (Corporate Credit Division) of PNB, Shri Rajeeva, inked the MoU in the presence of other distinguished officials from REC and PNB, including Director Finance, Shri Ajoy Choudhary, and Director (Projects), Shri V K Singh.
REC Limited, a Maharatna Central Public Sector Enterprise under the Ministry of Power, has been a cornerstone of India's financial landscape since its inception in 1969. It plays a pivotal role in providing long-term loans and various financial products for the Power sector, encompassing Generation, Transmission, Distribution, Renewable Energy, and cutting-edge technologies such as Electric Vehicles, Battery Storage, and Green Hydrogen. Remarkably, REC has also diversified its portfolio into the Non-Power Infrastructure sector, covering vital areas like Roads & Expressways, Metro Rail, Airports, IT Communication, Social & Commercial Infrastructure (including Educational Institutions and Hospitals), Ports, and Electro-Mechanical (E&M) works spanning various other sectors like Steel and Refinery. The sheer scale of its loan book surpasses an astonishing Rs. 4,54,393 Crore.
On the other hand, Punjab National Bank (PNB), a stalwart in the banking industry, boasts a rich history dating back to its establishment in 1894. This Public Sector Bank, with a strong presence across India and the world, including its involvement in funding infrastructure projects, ranks among the largest Public Sector Banks in the country. Its Global Gross Business stands tall at Rs. 22,14,741 crores.
The synergistic partnership between these two powerhouses, REC Ltd and PNB, heralds a new era of collaboration, promising to drive growth and innovation in the Power Sector and Infrastructure & Logistics Sector. As they join forces to finance projects on an unprecedented scale, investors and industry observers are keenly watching this partnership, which could shape the future of these companies and potentially influence the broader financial landscape.
Interestingly, both the stocks have delivered multibagger returns in the last one year.
Disclaimer: The article is for informational purposes only and not investment advice
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