Shares of power companies fell after the Allahabad court refused to extend the deadline for finalising the resolution plans for stressed power assets as mandated by the Reserve Bank of India.
Monnet Ispat and Energy Ltd fell as much as 4.8 per cent to Rs 14.05, while Rural Electrification Corp Ltd shares fell as much as 4.1 per cent to Rs 114.60 and Power Finance Corporation Ltd dropped as much as 4.4 per cent to Rs 81.15.
According to Edelweiss Securities analysts, the court's refusal paves the way for sector consolidation. The ruling implies that lenders to such companies will have to either finalise the resolution plan for assets within the next 15 days or refer the defaulting assets to the National Company Law Tribunal for liquidation.
NTPC Ltd, JSW Energy, Tata Power and Adani Power likely to be key beneficiaries of the ruling, it says.
Shares of Adani Power Ltd touched their highest since February 14, climbing as much as 3.3 per cent to Rs 34.60; NTPC Ltd climbed as much as 5.1 per cent to Rs 174.55, its highest since May 3.
Published on August 28, 2018
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