NTPC stock closes 11.26% lower on CERC draft norms

National Thermal Power Corp. (NTPC) stock fell the most on Tuesday after Central Electricity Regulatory Commission (CERC) issued  draft regulations for the tariff period from 1-4-2014 to 31-3-2019 late on Monday.

The regulations will decide power tariff for power generating and transmission firms for the said period and are likely to affect the earnings of these firms.

The NTPC stock   closed 11.26 per cent lower on the BSE. Stock of Tata Power and Torrent Power fell  1.52  per cent and
4.83 per cent, respectively. The NTPC stock was the top loser on the NSE falling 11.70 per cent.

Weakness was seen in other power related stocks, including National Hydroelectric Power Corp (NHPC) ended 1.37 per cent lower, Power Grid stock slipped 3.05 per cent and SJVN was down 2.88 per cent on the BSE.

"We see huge negative impact for NTPC. However, we see lower impact for PGCIL, NHPC and SJVN," brokerage firm Emkay Global said in a report.

"The final regulations could be different from the draft as has happened in the past. However, given the quantum of negative impact is high compared to previous draft regulations even if the norms are relaxed a bit it would still be negative," the report added.

Analysts say the guidelines tightened some operational parameters, reducing the use of financial incentives for achieving transmission and generation targets.

nitesh kumar

pgdm 1st

source--business today