State-run Rural Electrification Corp today said its follow-on public offer to raise about Rs 3,500 crore is likely to hit markets by February 2010, and the draft prospectus for the same would be filed next month.

"We would file the Draft Red Herring Prospectus with Sebi by mid-December and the FPO is likely to hit the market by February next year," REC Chairman and Managing Director Uma Shankar told reporters on the Economic Editor's conference here.

REC, which finances and promotes rural electrification projects across the country, would offer one lakh shares out of the total offer of 17 lakh scrips to its employees.

"Our employees would get one lakh shares," he said.

The FPO comprises 15 per cent fresh equity and five per cent disinvestment by the government. The company plans to utilise the proceeds from the FPO to grant loans for financing power projects.

REC recently received the government approval to raise funds through a follow-on offer, the government will ride a piggyback on 15 per cent fresh equity. And the price band of the offer would be decided by the Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee.

After the FPO, the government's stake in the company would come down to 66.8 per cent from the current 81.82 per cent.