REC Limited has been fined a total of ₹5.31 lakh by the National Stock Exchange of India and BSE Limited for non-compliance with board composition norms during the quarter ended March 31, 2026. The penalty was levied under Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which pertains to the composition of the Board of Directors, including the failure to appoint a woman director.

The exchanges issued notices to the company on May 27, 2026, detailing the financial penalties. The total fine payable includes a basic fine of ₹4.5 lakh and GST of ₹81,000. The company was advised to ensure compliance and remit the payment within 15 days from the date of the notice to avoid further action, such as the freezing of promoter shareholdings.

Board Response and Waiver Request

In a meeting held on June 28, 2026, the Board of Directors of REC Limited acknowledged the non-compliance and the subsequent fines. The board has directed the company management to make regular follow-ups with the appointing authority, the Ministry of Power, Government of India, to expedite the appointment of the requisite number of Independent Directors.

The company has formally requested a waiver of the fines. In its submission to the exchanges, REC Limited stated that being a Government Company, the power to appoint Independent Directors is vested with the President of India, acting through the Ministry of Power. Consequently, the company asserted that it has no role in the appointment of directors and argued that the fines should be waived.

Breakdown of Penalties

The financial penalties imposed by the exchanges are detailed in the table below:

The notices further warned that if the non-compliance persists for a second consecutive quarter under specific regulations, the company could face transfer to the Z group and potential suspension of trading in its equity shares.

REC Ltd has incorporated a new wholly owned subsidiary, Kesurdi Power Transmission Limited, to facilitate the establishment of a 220 kV Gas Insulated Switchgear (GIS) project in Kesurdi, Satara. The incorporation, effective July 14, 2026, follows a Gazette Notification dated February 27, 2026, from the Government of Maharashtra which allocated the intra-state transmission project. REC Power Development and Consultancy Limited (RECPDCL), a wholly owned subsidiary of REC Ltd, was appointed as the Bid Process Coordinator (BPC) for this initiative.

Kesurdi Power Transmission Limited has been incorporated with an authorized capital and paid-up capital of ₹5,00,000. As a newly incorporated entity, the company has yet to commence business operations, and its turnover is currently not applicable. The subsidiary falls under the power sector and is classified as a related party of REC Ltd due to its ownership structure, though the promoter group holds no interest beyond the shareholding.

The primary objective of the acquisition is to execute the establishment of the 220 kV GIS Kesurdi project. The incorporation was pursued pursuant to the Maharashtra government's notification, which nominated RECPDCL to act as the BPC for selecting a Transmission Service Provider through the Tariff Based Competitive Bidding (TBCB) guidelines.

The consideration for the acquisition involved a 100% subscription to the equity share capital in cash at face value. Consequently, REC Ltd, through RECPDCL, has acquired 100% shareholding and control over the new entity. RECPDCL functions as the BPC for selecting transmission service providers for independent inter-state and intra-state transmission projects assigned by the Ministry of Power and various State Governments.

Following the selection of the successful bidder under the TBCB guidelines, Kesurdi Power Transmission Limited is slated to be transferred to the successful bidder along with all its assets and liabilities. The intimation was made to the exchanges pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Key Details of Kesurdi Power Transmission Limited