BSE Power index hits over 10-year high; Adani Power zooms 58% in a week


Shares of electric utilities companies continued trading higher on the bourses, with the Bombay Inventory Exchange (BSE) power index hitting an over 10-year high in intra-day commerce on Tuesday, on expectation of higher demand. Adani Power, Torrent Power and Tata Power gained over 4 per cent, every, on the BSE.

The S&P BSE Power index hit a high of 3,008, its highest level since January 2011, in intra-day commerce on Tuesday. At 10:39 am, the power index used to be up 0.96 per cent at 2,991, as in comparison to 0.17 per cent decline in the S&P BSE Sensex. Previously one week, the S&P BSE Power index has surged 6 per cent, against less than 1 per cent gain in the benchmark index.

Among individual stocks, Adani Power hit a record high of Rs 151 after soaring 19 per cent in intra-day commerce today on the back of heavy volumes. The inventory of the Gautam Adani-led Adani Group company has zoomed 58 per cent up to now one week. The trading volumes on the counter jumped almost three-fold with a combined around 131 million shares, representing 3.4 per cent of complete fairness of Adani Power, changing hands on the NSE and BSE.

According to CARE Ratings, power generation and consumption is expected to strengthen in FY22 with the anticipated higher levels of economic activity amid optimism that the vaccination programme would facilitate normalization and stimulate economic recovery.

At the same time, the uncertainty pertaining to the effective regulate of the pandemic and the likelihood of prolonged restriction being imposed across regions poses a risk to the sustainability in economic revival and thereby power demand. The electricity generation is projected to grown by 5 to 7 per cent in FY22 from that in FY21, the rating agency said in recent power sector outline.

Meantime, Ministry of Power (MoP) has recently released a discussion paper on the implementation of Market-Based Economic Dispatch (MBED). The paper argues for redesigning of day- ahead scheduling of electricity markets in the country on a market based / integrated approach with a view to realise the ‘One Nation, One Grid, One Frequency, One Price’ framework. It also proposes the implementation of MBED phase-I starting with all the fleet of NTPC’s thermal stations from 1st Apr’22.

“Even if there is also changes once stakeholders share comments, as per our initial understanding, MBED is a wider scoped SCED, which is already operational, and will result in more efficient utilisation of low cost generating capacity across the country, and thereby, minimize tariffs for discoms and consumers. Earlier, it used to be only for ‘cost-plus’ assets but will now be for all power plants. Gencos (central and private) and discoms are expected to get pleasure from this move,” analysts at ICICI Securities said.

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