Shares of power generation companies have rallied on bourses in morning trades in otherwise weak market after the Government directed the state-owned coal manufacturer Coal India to sign 20-year fuel supply agreements (FSAs) with power producers within a week.
“The decree will help power firms run idling plants, sell electricity and secure finance. It will help idling thermal plants with a total capacity of 28,000 mw that have been built by last December, and another 22,000 mw that will be constructed in the next three years,” the report suggests.
“The Prime Minister's Office (PMO) directive followed a petition from the power producers, including Reliance power and Tatas, who had claimed that new projects commissioned since April 2009 have been running at a sub-optimal capacity as they were unable to get sufficient coal from Coal India. They also claimed that investments running into thousands of crores were at risk due to inadequate domestic supplies, added report.
Among the individual stocks, Adani Power has rallied 4% to Rs 73, followed Tata Power, Reliance Power, JSW Energy, Torrent Power and CESC are trading higher by 2-3% on the Bombay Stock Exchange.