Mumbai: Stocks of cash-rich power companies rallied on Monday, while power developers fell following a Allahabad High Court order.
Anuj Upadhayay, research analyst, power sector, Emkay Global Financial Services, said, “The banks can file case once the deadline is over, which means these stressed power assets could be sold at dirt cheap rates to cash rich companies, this may have triggered the upmove as otherwise there is no developments to push these stocks up.”
The gainers on BSE included Adani Transmission (19.92 per cent), Adani Power (6.53 per cent), Tata Power (5.51 per cent), Torrent Power (4.35 per cent), Power Grid (3.64 per cent), Reliance Infra (2.83 per cent), NTPC (1.13 per cent), Rural Electrification Corporation (7.27 per cent), Power Finance Corporation (6.06 per cent).
The PSU bank lenders also rallied, led by State Bank of India (2.65 per cent), Bank of Baroda (1.80 per cent), Union Bank of India (3.88 per cent), Canara Bank (3.15 per cent), Bank of India (1.94 per cent) and Allahabad Bank (0.99 per cent). But Punjab National Bank bucked the trend closing 0.41 per cent lower.
VK Sharma, head, private client group & capital market strategy, HDFC Securities, said, “The judgement by the Allahabad High Court that banks will have to follow the RBI guidelines, that came after the markets closed for the day may take some wind out of power companies that were expecting a special treatment.”
Hemang Jani, head, advisory, Sharekhan by BNP Paribas said, “Banking stocks gained momentum on back of news that six-month deadline set by RBI to finalise resolution plans for around 70 large stressed accounts worth over Rs 3.8 lakh crore ends on Monday.”