REC FPO Basis of Allotment

RURAL ELECTRIFICATION CORPORATION LIMITED

Our Company was incorporated under the Companies Act, 1956, as amended on July 25, 1969 at New Delhi as 'Rural Electrification Corporation Private Limited'. Presently, the name of our company is 'Rural Electrification Corporation Limited', For details in relation to the change in name of the Company and its registered office, see the section titled 'History and Certain Corporate Matters' on page 94 of the Prospectus.

Registered and Corporate Office: Core 4, SCOPE Complex. 7, Lodhi Road, New Delhi 110 003, India
Telephone: +91 11 2436 5161, Facsimile: +91 11 2436 0644; E-mail:. fpo@recl.nic.in. Website: www.recindia.nic.in Company Secretary and Compliance Officer: Mr. B. P. Raghunandan
Telephone: + 91 11 2436 7305; Facsimile; +91 11 2436 2039; E-mail, complianceofficer@recl.nic.in

BASIS OF ALLOTMENT

THE FLOOR PRICE (FOR BIDS SUBMITTED BY NON-INSTITUTIONAL BIDDERS AND RETAIL INDIVIDUAL BIDDERS) IS RS. 203 PER EQUITY SHARE. THE FLOOR PRICE IS 20.3 TIMES OF THE FACE VALUE. THE CLEARING PRICE (FOR BIDS SUBMITTED BY QUALIFIED INSTITUTIONAL BUYERS, INCLUDING MUTUAL FUNDS) IS RS. 206 PER EQUITY SHARE. THE EMPLOYEE PRICE (FOR BIDS SUBMITTED BY ELIGIBLE EMPLOYEES UNDER THE EMPLOYEE RESERVATION PORTION) IS RS. 193 PER EQUITY SHARE.

All terms used herein and not specifically defined shall have the same meaning as ascribed to such terms under the Prospectus dated February 25, 2010 (the 'Prospectus') with the Registrar of Companies, National Capital Territory of Delhi and Haryana.

The Issue was made through the Alternate Book Building Process wherein up to 50% of the Net Issue was available for allocation on a price priority basis to Qualified Institutional Buyers ('QIBs') (including 5% of the QIB portion that was to be specifically available for allocation to mutual funds) subject to valid Bids being received from them above the Floor Price. Further, not less than 15% of the Net Issue was available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue was available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at the Floor Price. Further, 3,50,000 Equity Shares was available for allocation to eligible employees, subject to valid bids being received from them at the Employee Price.

The Issue received 57,858 applications for 538,911,584 Equity Shares resulting in 3.14 times subscription. The details of the applications received In the Issue, through the various escrow collection banks, from QIBs, Non-Institutional Bidders, Retail Individual Bidders and Eligible Employee categories are as under(before technical rejections)

Final Demand
A summary of the final valid demand at different Bid Prices is as under;

The Basis of Allocation was finalized in consultation with the Designated Stock Exchange i.e., National Stock Exchange of India Limited ('NSE') on March 5, 2010.

A. Employees
The 'Basis of Allocation' to the Eligible Employees of the Company, who have bid at the Employee Price of Rs.193 per Equity Share, was finalized in consultation with the NSE. The total number of Equity Shares allotted in this category is 293,040. The undersubscribed portion of 56,960 Equity Shares has been added to the net issue..

B. Allocation to Retail Individual Bidders (including ASBA Applications) (After Techanical rejections)
The 'Basis of Allocation' to the Retail Individual Bidders, who have bid at the floor price of Rs.203 per Equity Share, was finalized in consultation with the NSE. This category has been Subscribed to the extent of 0.22 times and hence allotment was done on full and firm basis to all valid applicants. Overall, 55,872 applications for 13,454,820 Equity Shares were found valid and they were considered for Allotment. The above Includes 13,469 valid applications for 5,092,920 Equity Shares made under the ASBA process. The total number of Equity Shares Allotted In Retail Portion is 13,454,820 Equity Shares to 55,872 applicants. Under subscription in the Retail Portion of 46,546,816 Equity Shares has been added to the QIB Portion.

C. Allocation to Non Institutional Bidders (After Technical Rejections)
The 'Basis of Allocation' to the Non-Institutional Bidders, who have bid at the Floor Price of Rs. 203 per Equity Share, was finalized in consultation with the NSE. This category has been subscribed to the extent of 2.05 times and hence Allotment was done on proportionate basis. Overall, 412 applications for 52,783,770 Equity Shares were found valid and they were considered for Allotment. The total number ot Equity Shares allotted In this category is 25,715,844 to 412 applicants. The sample 'basis of allocation' is given below:

D. Allocation to Qualified Institutional Bidders (After Rejections)
The 'Basis of Allocation' to the Qualified Institutional Bidders, who have bid above the Floor Price of Rs. 203 per Equity Share was finalized on the price priority basis. The Clearing Price was Rs. 206 per Equity Share. Overall, 276 applications for 472,095,180 Equity Shares were found valid and the quantum of Equity Shares Allotted to this category is 132,268,296 (Including spill-over of 46,577,296 Equity Shares from other categories) as per break-up given befow:

The FPO Committee of the Board of Directors of the Company, at its meeting held at Hyderabad on March 5, 2010, has  approved the 'basis of allocation' of Equity Shares for the Issue and has Allotted the Equity Shares to various successful applcants.
The CAN-cum-Refund Orders and Refund credit advice have been dispatched to the respective addresses of the Bidders as registered with the Depositories. In case the same is not received within 10 days, Bidders may contact the Registrar to the Issue at the address given below. The Refund Orders have been over-printed with the Bank Account details as registered, if any, with the depositories. The Equity Shares Allotted to successful applicants have been credited to their beneficiary accounts subject to validation of the account details with the Depositories concerned. The Company has obtained the listing and trading permission from the Bombay Stock Exchange Limited and the NSE and the Equity Shares allotted are tradable on the Stock Exchanges with effect from March 8, 2010.

INVESTORS PLEASE NOTE
These details of the allocation made would be hosted on the website of the Registrar to the issue, Karvy Computershare Private Limited at http://karisma.karvy.com

All future correspondences in this regard may kindly be addressed to the Registrar to the Issue quoting full name of the First/ Sole applicant, Serial number of the Bid cum Application Form, number of Equity Shares bid for, name of the member of the Syndicate and place where the Bid was submitted and payment details at the address given below:

Karvy Computershare Private Limited
Unit: RURAL ELECTRIFICATION CORPORATION LIMITED
Plot No. 17 to 24, Vlthal Rao Nagar, Hitech City Road. Madhapur
Hyderabad 500 081, India Fax: +91 40 2342 0814
Email: einward.ris@karvy.com

TOLL FREE - HELPLINE NUMBER
1-800-3454001

CORRIGENDUM: As disclosed in the Prospectus dated February 25, 2010 (the 'Prospectus'), in furtherance to the finalization of 'Basis of Allocation' by the Company and the Selling Shareholder in consultation with the NSE, i.e., the Designated Stock Exchange, the aggregate issue size has been revised from Rs. 35,299.42 million to Rs. 35,300.43 million. Acconingly, the Prospectus shall stand amended to this effect.

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF RURAL ELECTRIFICATION CORPORATION LIMITED.

Rural Electrification Corporation Limited (the 'Company') has made a further public offer of its equity share and has filed a prospectus with the registrar of Companies, NCT of Delhi and Haryana, the Stock Exchanges and the Securities and Exchange Board of India ('SEBI'). The Prospectus is available on the website of SEBI at www.sebi.gov.in and the respective websites of the BRLMs at, www.kmcc.co.in, www.dspml.com, www.icicisecurities.com, www.jmfinancial.in and www.abnamro.co.in. Investors should note that Investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled 'Risk factors' of the Prospectus.
This advertisement does not constitute an offer of securities for sale in any jurisdiction, includtng the United states. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. The Company has not and does intend to register any securities under the U.S. Securities Act of 1933, as amended, and does not Intend to offer any securities to the public in the United States. The  Company will not be registered under the U.S. investment Company Act of 1940, as amended, and Investors will not be entitled to the benefits of that Act- No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this advertisement will not bo accepted.