REC Ltd has incorporated three wholly owned subsidiaries to facilitate specific power transmission projects in Rajasthan and Uttar Pradesh. The entities, established as subsidiaries of REC Power Development and Consultancy Limited (RECPDCL), are designed to act as Special Purpose Vehicles (SPVs) for upcoming inter-state and intra-state transmission schemes.

The newly formed companies are Bikaner V Part A Power Transmission Limited, Bikaner V Part B Power Transmission Limited, and Mirzapur Power Transmission Limited. All three were incorporated on October 5, 2026, with an authorized and paid-up capital of ₹5,00,000 each. As these are newly incorporated entities, they have not yet commenced business operations or generated turnover.

Project Allocation and Role

The incorporation follows directives from the Ministry of Power and state authorities. RECPDCL has been appointed as the Bid Process Coordinator (BPC) for these projects. The two Bikaner entities are linked to the Rajasthan Renewable Energy Zone (REZ) Phase-IV, specifically the evacuation of power from the Bikaner Complex (6GW). The Mirzapur entity is associated with an intra-state project allocated by U.P. Power Transmission Corporation Limited, involving the construction of 765 kV and 400 kV lines linked to the Mirzapur Pooling Substation.

Transfer Mechanism via TBCB

These subsidiaries are temporary vehicles intended to hold assets until a successful bidder is selected through the Tariff Based Competitive Bidding (TBCB) process. Once the bidder is chosen, the respective company will be transferred to them along with all associated assets and liabilities. This structure allows RECPDCL to manage the bidding process efficiently while ensuring the infrastructure is handed over to private operators who will execute and maintain the transmission lines.

What the Numbers Show

The uniform capitalization of ₹5,00,000 across all three entities highlights their role as administrative shells rather than operational businesses at this stage. The identical paid-up capital suggests a standardized approach by RECPDCL for setting up SPVs under the TBCB framework. The split between two separate entities for the Bikaner complex (Part A and Part B) indicates that the 6GW evacuation capacity is being tendered or managed as distinct packages, potentially to attract multiple bidders or manage different segments of the transmission network separately.

REC Ltd has submitted a request to the National Stock Exchange and BSE to waive fines levied for failing to maintain the required composition of its Board and Committees during the quarter ended June 30, 2026. The company attributes this non-compliance to its status as a government entity, where the authority to appoint directors rests with the President of India through the Ministry of Power.

Regulatory Notice and Board Response

The exchanges issued notices on August 25, 2026, highlighting REC's failure to comply with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Specifically, the company did not meet the stipulated requirements for the number of Independent Directors on its Board. In response, REC's Board of Directors reviewed the matter in a meeting held on September 19, 2026.

The Board noted the position of non-compliance and the associated fines. It directed management to engage in regular follow-up with the Ministry of Power, Government of India, to expedite the appointment process for the requisite number of Independent Directors.

Grounds for Waiver Request

REC argues that as a Government Company, its Articles of Association vest the power to appoint Independent Directors exclusively with the President of India, acting through the administrative ministry. The company stated it has no role in these appointments, making the non-compliance beyond its direct control.

Key points from the submission include:

• The power to appoint Independent Directors is vested with the President of India via the Ministry of Power.
• REC has no role in the selection or appointment of these directors.
• Fines imposed by stock exchanges should be waived given the lack of corporate control over the compliance issue.

Compliance Framework and Waiver Process

The exchanges referenced SEBI Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026, which outlines the standard operating procedure for imposing fines and suspending trading in cases of non-compliance. To apply for a waiver, companies must adhere to specific procedural requirements outlined by the exchanges.

The exchanges emphasized that compliance is a prerequisite for applying for a waiver. Applications for non-compliant companies will not be processed until the regulatory breach is rectified. Additionally, if a company is non-compliant under multiple regulations, it must file a single application detailing all respective regulations and quarters involved.

What the Numbers Show

The core tension in this filing lies in the structural disconnect between regulatory obligations and governance control. While SEBI mandates strict board composition for listed entities to ensure independent oversight, REC's governance structure places the appointment mechanism entirely outside the company's operational purview. This creates a scenario where the listed entity bears financial penalties for delays caused by a sovereign administrative process, highlighting a potential friction point in the regulation of Public Sector Undertakings (PSUs) versus private listed firms.