Power, PSU bank stocks trade weak as Allahabad HC refuses interim relief

REC, PFC, Adani Power, Tata Power and GMR Infrastructure were down in the range of 1% to 4% on the BSE.

Shares of power and power finance companies were trading lower by up to 2% in an otherwise strong market after the Allahabad High Court refuses interim relief to power firms from Reserve Bank of India (RBI) directions.

Rural Electrification Corporation (REC), Power Finance Corporation (PFC), Adani Power, Tata Power and GMR Infrastructure were trading lower in the range of 1% to 4% on the BSE.  On comparison, the S&P BSE Sensex hit a new high of 38,920 in early morning trade, was up 0.31% at 38,813 at 09:34 am. These stocks had rallied up to 7% on Monday, ahead of High Court decision.

Union Bank of India, Bank of India, Canara Bank, Punjab National Bank (PNB) and Bank of Baroda, too, were trading lower by 1% each on the BSE.

The Allahabad High Court (HC) refused on Monday to provide relief for privately-owned stressed power projects from the RBI’s February 12 order.

The RBI circular directed lenders to undertake insolvency resolution of defaulting companies within a strict timeline. The central bank had ordered banks to identify stress even when repayments were overdue by only a day. Resolution proceedings must be completed in 180 days, a deadline that ended on Monday.

The court has, however, allowed the affected companies to try the legal route for individual grievances, the Business Standard reported. CLICK HERE TO READ FULL REPORT