A Presentation on the Rural Electrification Corporation Limited (RECL)- Mini Projet- MBA 2019-2020

1. A Presentation on The
Rural Electrification Corporation Limited
(RECL)
A Mini Project Review Submission to
The Department of Management Science
of
Sasi Institute Of Technology & Engineering (Autonomous),
SITE
Submitted by :
I.CHANDRA SHEKAR
(Reg. No: 19K61E0020)
Under the Guidance of :
Smt. B. KUSUMA
ASSISTANT PROFESSOR

2. Chapter-1 Introduction
Need for the Study:
 In order to analyse about the RECL it is important to understand the flow of the industry in
first.
 Better understanding about the History, Growth And Development of power sector industry.
 The key factors involved in the growth of the Public Infrastructure Finance Company in
India’s power sector industry.
 Present study is to analyse the Market Performance of the company and overview of Market
Status.
 To know the HR policies and maintenance of rules and regulations of RECL , and facilities
given to the employees in the company.
 And also know the models of RECL all over India.

3. Scope of the Study:
 The scope of the study is to deal and discuss about the growth of the RECL in India and its
diversifications and Recent developments.
 It also helps to analyse present and future trends along with company's Market Size,
Market Prospects And Impacts on the Indian economy.
 The scope of the study also includes the CSR of the company.
 Helps in better understanding of the Financial Position And Management System of the
company.

4. Objective of the Study:
 The primary objective of the study is to know the company position in the Indian market
environment.
 To analyse the financial position & understand the financial and marketing strategies.
 To give a snapshot on SWOT Analysis & also to identify the potential market value of
RECL.
 To know what strategies are formulating and implementing for increasing the RECL in
market share & to understand the research methodologies of RECL
 To know the history and market position of the company
 To critically analyse the work and performance of RECL over period & to give concrete
suggestions for improvement of the company performance.

5. Research Methodology of the Study:
 The study has been done mainly on the basis of Secondary Data and Information
available from Books, Published Works, Web Sources like., Annual report on a
Company websites, Industry websites.
 To analyse the data I use both qualitative and quantitative tools like graphs, charts
and SWOT analysis.

6. Limitations of the Study:
 Time is one of the major constraint.
 This study is not based on the direct customer interactions.
 Information gathered was mainly from secondary data, i.e. from different website sources.
 In the financial statistical data is collected from secondary source and hence the validity
the may be subjected to certain errors.

7. Chapter II – Industry Profile
Introduction to Electricity Sector in India:
 India is the world's third largest producer and third largest consumer of electricity.
 India has a surplus power generation capacity but lacks adequate distribution infrastructure.
 To address this, the Government of India launched a program called “24*7 Power for All" in
2016. The program was accomplished by December 2018 in providing the necessary
infrastructure to ensure uninterrupted electricity supply to all households, industries, and
commercial establishments.
 Funding was made through a collaboration between the Government of India and its
constituent states.
 India's electricity sector is dominated by fossil fuels, in particular coal, which during the
2018-19 fiscal year.

8.  The government is making efforts to increase investment in renewable energy. The
government's National Electricity Plan of 2018 states that the country does not need more
non-renewable power plants in the utility sector until 2027 .
 India's Ministry of Power launched Deen Dayal Upadhyaya Gram Jyoti Yojana
(DDUGJY) as one of its flagship programmes in July 2015 with the objective of providing
round the clock power to rural areas.
 As of 28 April 2018, 12 days ahead of the target date, all Indian villages (a total of
597,464 villages) were electrified.
 India has also achieved close to 100% electrification of all rural and urban households.
As of 4 January 2019, 211.880 million rural households were provided with electricity, close
to 100% of the 212.65 million total rural households

9. Coal: 204,724.5 MW (55.6%)
Large Hydro: 45,399.22 MW (12.3%)
Small Hydro: 4,671.56 MW (1.3%)
Wind Power: 37,505.18 MW (10.2%)
Solar Power: 33,730.56 MW (9.2%)
Biomass: 10,001.11 MW (2.7%)
Nuclear: 6,780 MW (1.8%)
Gas: 24,955.36 MW (6.8%)
Diesel: 509.71 MW (0.1%)
Installed capacity by source in India as on 31 January 2020: 3,68,277.20 MW

10. Demand For Growth Of Electricity Consumption In India:
• Nearly 0.28% of Indian households (0.6 million) have no access to electricity.
• The International Energy Agency estimates India will add between 600 GW to 1,200 GW of
additional new power generation capacity before 2050.
Electricity Generation:
• India has recorded rapid growth in electricity generation since 1985, increasing from 179
TW-hr in 1985 to 1,372 TW-hr in 2019.
Pollution from coal-based power plants:
• India's electricity sector consumes about 72% of the coal produced in the country. Coal
consumption by utility power was 608 million tons in 2017-18.
Electricity Transmission And Distribution:
• The Indian government set a target of reducing losses to 17.1% by 2017 & to14.1% by 2022.
Natural gas supply constraints:
• These plants were operating at overall plant load factor (PLF) of 22% due to a severe
shortage of natural gas in the country, and the fact that imported liquid natural gas
(LNG) was too expensive for power generation.
• Many power stations were shut down throughout the year for lack of natural gas supply.

11. Government-owned power companies:
• India's Ministry of Power administers central government-owned companies involved in
the generation of electricity in India.
• These include the National Thermal Power Corporation, Satluj Jal Vidyut Nigam
Limited, Damodar Valley Corporation, the National Hydroelectric Power Corporation
and the Nuclear Power Corporation of India.
• The Ministry works with state governments on matters related to state government-owned
corporations in India's electricity sector.
• Examples of state corporations include the Telangana Power Generation Corporation, the
Andhra Pradesh Power Generation Corporation Limited, the Assam Power Generation
Corporation Limited, the Tamil Nadu Electricity Board, the Maharashtra State Electricity
Board, the Kerala State Electricity Board, and Gujarat Urja Vikas Nigam Limited.
Funding of Power Infrastructure:
• India's Ministry of Power administers the Rural Electrification Corporation
Limited(RECL)and the Power Finance Corporation Limited(PFCL).
• These central-government-owned public sector enterprises provide loans and guarantees
for public and private electricity sector infrastructure projects in India.

12. Problems With India's Power Sector:
• Inadequate last mile connectivity : Over 10 million households use battery storage UPS as
back-ups in case of load shedding. India imports nearly US$2 billion worth of battery storage
UPS every year.
• Demand Build Up Measures:
• Unequal electricity distribution:
• Erratic power pricing:
• Over-rated capacity:
• Lack of timely information on load and demand:
• Lack of adequate coal supply:
• Poor gas pipeline connectivity and infrastructure:
• Transmission, distribution and consumer-level losses:
• Resistance to energy efficiency in the residential building sector:
• Resistance to hydroelectric power projects:
• Resistance to nuclear power generation:
• Theft of power: The financial loss due to theft of electricity is estimated at around $16
billion yearly.

14. Chapter - III Company Profile
Profile Of The RECL:
Incorporated On July 25, 1969 under the Companies Act 1956.
Parent Company A listed Navratna Company, Central Public Sector Enterprise (CPSEs) under
Ministry of Power, Government of India.
Category Investment Services in public Infrastructure Finance Company in India’s power sector.
Sector Non-Banking & Financial Services to Promotes rural electrification projects across
India.
Listed on Stock Exchange The Company was listed on NSE and BSE on 12 March 2008. IPO which was
oversubscribed by about 27 times, raising a total amount of ₹819 crores.
Business operations in
India
Corporate Office located at New Delhi, 23 offices across the country located in most
States in the country. It operator’s through a network of 18 Project Offices and 5
Zonal Offices.
Tagline/ Slogan Endless energy. Infinite possibilities.
USP Leading public Infrastructure Finance Company in India’s power sector.
RECL Loans
To
The company provides loans to Central/ State Sector Power Utilities, State Electricity
Boards, Rural Electric cooperatives, NGOs and Private Power Developers.

15. Vision & Mission of RECL :
vision:
• RECL will lead the way to the future of mobility, enriching lives around the world with the
safest and most responsible ways of moving people.
• Through our environment to quality, constant innovation and respect for the planet, we aim
to exceed expectations, and be rewarded with a smile.
Mission:
• To facilitate availability of electricity for accelerated growth and for enrichment of quality
of life of rural and urban population.
• To act as a competitive, client-friendly and development oriented organization for financing
and promoting projects covering power generation, power conservation, power
transmission and power distribution network in the country.

16. Objectives of RECL:
• To mobilize funds from various sources including raising of funds from domestic and
international agencies and sanction loans to the State Electricity Boards, Power Utilities, State
Governments, Rural Electric Cooperatives, Non-Government Organizations (NGOs) and private
power developers.
• To assist State Electricity Boards/Power Utilities/State Governments, Rural Electric
Cooperatives and other loanees by providing technical guidance, consultancy services and
training facilities for formulation of economically and financially viable schemes and for
accelerating the growth of rural and urban India.
• To promote and finance projects aimed at integrated system improvement, power generation,
promotion of decentralized and non-conventional energy sources, energy conservation, renovation
and maintenance, power distribution with focus on pump set energisation, implementation of
Deendayal Upadhyaya Gram Jyoti Yojana, a Government of India scheme.
• To expand and diversify into other related areas and activities like financing of decentralized
power generation projects, use of new and renewable energy sources, consultancy services,
transmission, sub-transmission and distribution systems, renovation, modernization & maintenance
etc. for optimization of reliability of power supply to rural and urban areas including remote, hill,
desert, tribal, riverine and other difficult/remote areas.

17. Sanctions (FY 2018-19): Total Sanctions ₹1,18,613cr
Disbursement (FY 2018-19): Total Disbursement ₹ 72,165cr
Competitors For RECL:
• Power Finance Corporation Ltd.
• Infrastructure Development Finance.
• Industrial Finance Corporation of India Ltd.
(IFCI)
• Haryana Financial Corporation of India Ltd.
• Gujrat State Financial Corporation.
The different types of projects funded by
RECL are as under:
Subsidiary Companies of RECL :
• REC Transmission Projects Company Limited
(RECTPCL)
RECTPCL has 13 Subsidiary companies
• REC Power Distribution Company Limited
(RECPDCL)

18. SWOT Analysis on RECL:
STRENGTHS:
• Strong financial backing: A Government Enterprise.
• Building reputation: Company among the top 500
Global Financial Services brands.
• Recognized a Navratna company, which gives it
autonomy to drive its growth.
• Accorded high-test safety ratings by CRISIL, FITCH
and CARE.
• Provides loans to Central/ State Sector Power
Utilities, State Electricity Boards, Rural Electric
Cooperatives, NGOs and Private Power Developers.
• Offers services like investment and asset
management.
OPPORTUNITIES:
• Plans to undertake rural electrification programs
in other countries.
• Expansion through mergers, acquisitions and
investments and other entities.
• THREATS:
• Lenders defaulting on loans. Big defaults are
costly to the company as they put pressure on
profit margin.
• Lag in time of structuring deals due to
environmental (such as political, social,
economic, technical, and legal, etc.) factors.
• Affected by regulatory and legal changes.
WEAKNESSES:
• Susceptible to political intervention.
• Pressure of paying consistent dividends due to
government being the major shareholder

19. Composition of The Board of Directors of RECLAs on March 31, 2019 Was As Below:
Sl.
No.
Name Director Identification
Number (DIN)
Position
Whole Time Directors (Executive Directors)
1. Shri Ajeet Kumar Agarwal 02231613 Chairman and Managing Director
(Additional Charge) & Director
(Finance)
2. Shri Sanjeev Kumar Gupta 03464342 Director (Technical)
Government Nominee Director (Non-Executive Director)
3. Dr. Arun Kumar Verma 02190047 Government Nominee Director
Part time Non Official Independent Directors
4. Shri.A. Krishna Kumar 00871792 Independent Director
5. Prof. T.T.Ram Mohan 00008651 Independent Director
6. Smt. Asha Swarup 00090902 Independent Director
7. Dr. k. Bhagvat Kisan rao 00998839 Independent Director

20. Corporate Social Responsibility & Sustainable Development of RECL
• The Company’s CSR funds are channelized through ‘REC Foundation’, a society registered under
the Societies Registration Act, 1860.
• During the financial year 2018-19, the Company sanctioned a total amount of ₹158.72 crore towards
various CSR projects in the fields of health care, drinking water and sanitation, skill development,
education, environmental sustainability, rural development and community development.
• Average net profit of the Company for last three financial years:
The net profit of the Company for the last three financial years, as per Companies Act 2013, is as under:
Particulars (₹ in crore)
Financial Year 2015-16 : 8,032.15
Financial Year 2016-17 : 8,774.66
Financial Year 2017-18 : 6,786.41
Total : 23,593.22
Average net profit : ₹7,864.41 crore
Prescribed CSR expenditure (2 per cent of the amount as in
item above): ₹157.29 crore.
Details of CSR spent during the financial year:
 Total amount to be spent for the financial year: ₹157.29
crore.
 Amount unspent, if any: The unspent amount for the year
is ₹53.90 crore.

21. Chapter-IV Functional Departments of RECL
1.MARKETING DEPARTMENT: RECL STPApproach In Marketing
 Segment: State Electricity Boards, State Government Departments and Rural
Electric Cooperatives.
 Target Group: State Electricity Boards, State Government Departments and Rural
Electric Cooperatives looking for financing rural electrification
projects.
 Positioning: Facilitate in formulation of schemes, loan sanction and
disbursement and implementation of schemes by the concerned
SEBs/State Power Utilities.

22. 2. HR DEPARTMENT
Human Resource Management:
• In order to professionalize the Executive strength of RECL and also to infuse fresh
blood, three executives were appointed through Campus Recruitment during the
financial year.
• The total manpower Recruitment by RECL as on March 31, 2019 was 487 employees
which includes 386 executives and 101 non-executives
Group Number of Employees
TOTAL SC ST
FY 2018-19 FY 2017-18 FY 2018-19 FY 2017-18 FY 2018-19 FY 2017-18
A 346 363 34 35 13 13
B 75 87 12 15 2 2
C 09 16 1 1 0 0
D 57 62 17 17 1 1
Total 487 528 64 68 16 16

23. Training & Human Resource Development:
In order to equip the employees professionally, the Company sponsored 203 employees to various
training programmes, workshops, etc. within the country and abroad. Taken together, these initiatives
enabled the Company to achieve 893 training man days. Further, 19 Executives were deputed for
programmes abroad.
Employee Welfare :
In order to provide improved health care facilities to the employees and their dependent family
members, the Company has expanded the list of empanelled hospitals under Direct Payment Scheme
Sports Activities:
During the financial year 2018-19, REC hosted an Inter-CPSU Table Tennis Tournament at New
Delhi and also sponsored its employees for various Inter-CPSU sports tournaments such as
Badminton, Table Tennis, Volley Ball, Kabaddi, Chess etc., organized by various power sector
CPSUs under the aegis of Power Sports Control Board (PSCB).

24. Industrial Relations:
The Industrial Relations scenario in the Company continued to be cordial and harmonious in the
financial year 2018-19. There was no loss of man days on account of industrial unrest. Regular
interactions were held with REC Employees Union and REC Officers Association on issues of
employee welfare. This has helped to build an atmosphere of trust and cooperation resulting in a
motivated workforce and continued improvement in business performance. Wage negotiations for
non-executives effective from January 1, 2017 was successfully concluded.
In-house Training Programmes:
RECL also organised four in-house programmes for the employees and 47 employees have taken
part in these programmes. The topics covered are Understanding of SPU’s Grading and REC’s
Business Areas, sponsored by REC; Loan Documentation, Goods and Services Tax
Implementation and Leadership & Communication Skills.
Representation Of Women Employees:
As on March 31, 2019, the Company had 78 permanent women employees, which represent 16.01
% of the total work force. There is no discrimination of employees on the basis of gender. A
Women Cell has been in operation in the Company to look after welfare and all round development
of women employees. International Women’s Day was celebrated by RECL Women’s Cell.

25. 3.FINANCE DEPARTMENT : Financial Performance
Performance Growth
5,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
(` ₹ in crore) Profit After Tax (` ₹ in crore)

26. EPS vs. DPS
EPS (₹) DPS (₹)
Book Value per Share (₹)
180
160
140
120
100
80
60
40
20

27. Ratio Analysis:
A comparative statement of important ratios of the Company for the financial year
2018-19 vis-à-vis 2017-18 Is as below:
Particulars FY 2018-19 FY 2017-18
Earnings Per Share (₹) 29.18 22.38
Return on Average Net Worth (%) 17.31 14.06
Book Value per Share (₹) 173.69 163.57
Debt Equity Ratio (times) 6.98 6.15
Price Earnings Ratio (times) 5.24 5.57
Interest Coverage Ratio (times) 1.52 1.44

28. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity)
A. Total Shareholding of Promoters:
No. of shares held at the end of the year
(April 1,2018) (March 31,2019)
1,15,16,78,783
% of Total year
Shares
% of Total year
Shares
58.32 1,03,94,95,247 52.63
B. Public Shareholding:
62,88,52,368 31.84 77,39,89,501 39.19
1.Institutions
2.Non-institutions 19,43,86,849 9.83 16,14,33,252 8.17
C. Grand Total (A+B) : 1,97,49,18,000 100.00 1,97,49,18,000 100.00
(Demat)
(Demat)
(Demat+Physical)
Equity Share Capital
Particulars As at 31.03.2019 As at 31.03.2018 As at 01.04.2017
No. of Shares Amount No. of Shares Amount No. of Shares Amount
Authorised:
Equity shares of ₹ 10 each 5,000,000,000 5,000.00 5,000,000,000 5,000.00 5,000,000,000 5,000.00
Issued, Subscribed and Paid up:
Fully paid up Equity shares of ₹
10 each
1,974,918,000 1,974.92 1,974,918,000 1,974.92 1,974,918,000 1,974.92
Total 1,974,918,000 1,974.92 1,974,918,000 1,974.92 1,974,918,000 1,974.92
(₹ in Crores)

29. Chapter-V Findings, Suggestions& Conclusion
Findings::
 It is observed that RECL only concentrating on the well knowledge peoples for hiring.
 It is found that in market segmentation they concentrate on only two aspects those are
demographics and psychographics.
 It is observed that RECL does not considering, the consumer's income.
 It is observed that RECL has also invested heavily on safety in their electricity.
 It is found that some of the employees said that RECL is not a good place for employment.
 It is observed that RECL decision making process is slow.
 It is found that the RECL is providing Good monitory and non-monitory benefits to their
employees.
 It is observed that RECL focus in CSR is on bringing about inclusive growth in the society
through interventions to promote education, improve healthcare and support rural development.

30. Suggestions:
 It is better to the company will also give chance to minimum knowledge people and to
facilitate better facilities to them training.
 It is better to the company will also concentrate on other aspects like Behavioural,
Geographical, & Economical factors along with Demographical &Psychographic aspects.
 It is better to consider consumer earning capacity.
 It is better to reduce the cost of investment on safety, and then it will be leads to low cost of
Production.
 It is need to provide better facilities and better working conditions for employees.
 It is better to provide performance based incentives.
 It is better to encourage the research and development.

31. Conclusion::
 Power is an essential requirement for industrial and agricultural growth in particular, and in improving
the quality of life in general has been given due recognition in India since independence.
 It has been observed in the study that the gap between demand and supply of power has been increasing at
a faster rate. In the context of the present power shortage and resource crunch for implementation of new
power projects, various measures to manage the supply and demand may help in bridging the existing gap.
 It has been observed in the study that transmission and distribution loss is high in the power sector in
India. The growth of transmission and distribution system could not keep pace with the growth in
generation capacity may be due to low level of investment in transmission and distribution during the five
year plans.
 The company also provided finance to accelerate the pace of rural electrification in the overall context
of planned programmes for increased agricultural production. Besides finance, RECL also offered
appraising, consultancy, technical support and monitoring of projects, to assist State Electricity
Boards/Power Utilities, Rural Electric Cooperatives and other such institutions.

32. Department of Management Science
Thank You