Power shares at multi-year lows; NTPC hits nine-year low

Shares of power generation companies are trading at multi-year lows on the bourses.

Reliance Power (Rs 33) and Adani Power (Rs 20) are trading at lifetime lows, while state-owned power major NTPC is quoting at Rs 107, its lowest level since July 2006.

Tata Power Company, PTC India and GMR Infrastructure, listed on the BSE power index, are currently trading at 52-week lows.

the S&P BSE Power index, was down 1% at 1,763 points compared to a 0.79% rise in the S&P BSE Sensex. The power index has hit a 52-week low of 1,743 in intra-day trades.

According to CRISIL Ratings, power projects worth 46,000 mw are facing viability issues due to lack of long-term buyers for electricity, inadequate fuel supply, and aggressive bidding to win projects and coal blocks.

“Of this, 36,000 mw are coal-based projects within which tariff under-recovery has impacted 20,000 mw of capacities, while the rest are reeling because of inadequate feedstock and poor electricity offtake by discoms. And 10,000 mw of gas-based projects have become unviable because of dwindling fuel supplies from the Krishna-Godavari basin,” the rating agency said in its July 2015 report.

CRISIL believes that merchant power prices will remain subdued over the near-to-medium term on account of large untied capacities leading to increased competition in the merchant market.

NTPC Limited