Power Grid falls 6% in two days as RBI bars fresh FII buying

The foreign shareholding through FIIs/RFPIs in Power Grid Corporation has reached the trigger limit, RBI said.

Shares of Power Grid Corporation of India is trading lower by 3.4% at Rs 137, extending its previous day’s 3% fall on BSE, after the Reserve Bank of India (RBI) put restrictions on further purchases of shares of the company by foreign investors.

RBI on Friday notified that the foreign shareholding through Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) in Power Grid Corporation of India has reached the trigger limit.

Therefore, further purchases of equity shares of this bank would be allowed only after obtaining prior approval of the Reserve Bank of India, RBI said in a press release.

According to data available with the BSE, FIIs were holding 27.41% shares in Power Grid as of quarter ended September 2014.

Meanwhile, Reuters report suggests that the shares of state-owned electric utilities decline on MSCI exclusion worry.

"With the stock moving into the FII caution list, we believe it will move out of the MSCI India portfolio," added report quoting Emkay Equity Advisory.

Emkay Equity says it expects the announcement from the MSCI to be released in the next 1-2 sessions, it added.

The stock opened at Rs 142 and hit a low of Rs 136 on BSE so far. A combined 4.64 million shares changed hands on the counter till 1016 hours on BSE and NSE.