Shares of select power companies hogged limelight after the Supreme Court on Tuesday quashed the February 12, 2018 RBI circular on non-performing assets.
Going with market experts, this was an important judgment as the circular was a big overhang on the power sector and lenders to the sector.
SC says RBI rules on defaulting companies are illegal.
The court declared Feb 2018 RBI circular on NPAs ultra vires, ETNOW repoted.The RBI circular had earlier directed banks to refer any loan account over Rs 2,000 crore under the Insolvency and Bankruptcy Code (IBC) if it is not resolved within 180 days of default.A relief from this circular will mean big benefit to Power Finance Corporation, which has recently been taken over REC.
Also, this will provide a breather to PSU banks, especially SBI, as it is big lender to the sector, said Sameer Kalra, Founder, Target Investing.Shares of Power Finance Corporation traded 2.93 per cent higher at Rs 123.10 after the ruling.
Other power-related stocks such as Adani Power (up 3.40 per cent), NTPC (up 1 per cent), Tata Power (up 1.75 pe cent) and Power Grid (up 2.40 per cent also gained in morning trade.The BSE Power Index traded 1.23 per cent higher at 2,056 at around 11 am (IST).