News: REC through its wholly-owned subsidiary REC Power Development and Consultancy (RECPDCL) has handed over six special purpose vehicles to Power Grid Corporation of India. The special purpose vehicles (SPVs) are mostly for construction of transmission projects in Gujarat. Powergrid won the projects on tariff based competitive basis route
Views: The projects would increase the viability on capitalisation of the company given most transmission projects are relatively of smaller size given they are for renewable projects. However, we fear that IRRs on this project would be lower than traditional nominated projects. Further, the management has also alluded to higher competitive intensity on TBCB projects, which will lead to further dilution of IRRs
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