Power stocks tumble as Centre directs late payment surcharge not exceeding 12% to cushion Discoms

Power Ministry's measure will ease out the financial burden on Discoms.

Aug 24, 2020 10:08 IST India Infoline News Service

Power stocks broadly traded in the red zone on Monday after the ministry directed all generating companies (Gencos) and transmission companies (Transcos) to charge late payment surcharge at a rate not exceeding 12% per annum for all payments made under the Liquidity Infusion Scheme of PFC and REC under Atmanirbhar Bharat.

On Sensex at around 10.53 am, NTPC was trading at Rs104.80 per piece down 1.09%,  Power Grid at Rs187.30  per piece below 0.93%, NHPC at Rs22.60 per piece lower by 2.80% and Tata Power at Rs61.10 per piece down 1.29%.

Similarly, Power Finance Corp (PFC) and REC were trading in red at Rs99 per piece and Rs112.10 per piece slumping by 2.03% and 0.58% respectively.

On the other hand, Adani Transmission witnessed buying sentiment trading at Rs276.50 per piece up 1.64% on Sensex.

Power Ministry's measure will ease out the financial burden on Discoms.

The ministry on Saturday said, "In general, the applicable rate of Late Payment Surcharges is quite high despite the fact that interest rates in the country have softened over the last few years. The rate of LPS in many cases ranges up to 18% per annum and has adversely impacted Discoms during this difficult phase of lockdown imposed on account of COVID-19 pandemic."

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