Allahabad HC order to undermine future investment in Indian power sector

The order will be a negative for large power generation projects belong to companies like Jaiprakash Associates, Lanco, GMR, KSK and Essar Power

The Allahabad High Court refusing to grant interim relief to power companies, which had filed pleas against RBI norms on stressed loans, is a setback for the sector as a whole. The authors explain why only financial engineering, without resolving key structural issues, cannot revive these stressed power projects. 

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On the backdrop of the 180-day grace period granted by the Reserve Bank of India (RBI) ending on Monday, the Allahabad High Court refused to grant interim relief to the firms facing National Company Law Tribunal (NCLT) proceedings. According to the RBI's February 12, 2018, circular, 60 companies that