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 Limited has incorporated Nawada Durgapur Power Transmission Limited as a wholly owned subsidiary of REC Power Development and Consultancy Limited. The new entity, incorporated on July 10, 2026, will operate within the power sector and is classified as a related party of REC Limited. The subsidiary was established to facilitate the ERES-47: Nawada – Durgapur – Jeerat (New) 765kV corridor project, which was allocated by the Ministry of Power, Government of India via a Gazette Notification dated March 24, 2026.

REC Power Development and Consultancy Limited has been appointed as the Bid Process Coordinator for this inter-state transmission project. Following the selection of a successful bidder through Tariff Based Competitive Bidding guidelines, the subsidiary will be transferred to the winning bidder along with all its assets and liabilities. The promoter, promoter group, and group companies of REC Limited hold no interest in the new entity other than their shareholding extent.

The incorporation was disclosed to the exchanges pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The authorized and paid-up capital of Nawada Durgapur Power Transmission Limited stands at ₹5,00,000. As the company is newly incorporated and yet to commence business, its turnover is currently not applicable.

Key Details of Nawada Durgapur Power Transmission Limited

The specific purpose of the acquisition is to undertake the identified transmission corridor project. The consideration for the acquisition involved a 100% subscription to the equity share capital in cash at face value. REC Power Development and Consultancy Limited acts as the Bid Process Coordinator for the selection of Transmission Service Providers through the competitive bidding process for projects assigned by the Ministry of Power and State Governments.