Power stks zoom as Cabinet ups lending limits for discoms; Tata Power up 8%

Currently, discoms can borrow only up to 25 per cent of their previous year's working capital under the limits stipulated in the UDAY scheme. The limit, however, has now been relaxed

Shares of power distribution companies charged ahead in an otherwise weak market, surging up to 9 per cent, on the BSE on Thursday after the Cabinet Committee on Economic Affairs (CCEA) on Wednesday relaxed the borrowing limits for the state government-owned power distribution companies (discoms) as a one-time measure.

Currently, discoms can borrow only up to 25 per cent of their previous year’s working capital under the limits stipulated in the UDAY scheme. Borrowing were tied to discoms’ operational performance to ensure discipline. The limit, however, has now been relaxed for a one-time lending. This would help those discoms that