NTPC plunges to 5-year low on CERC pricing rules; top Sensex loser

NEW DELHI: NTPC Ltd plunged as much as 11.5 per cent to touch its five-year low of Rs 116.95 after the Central Electricity Regulatory Commission or CERC on Sunday allowed Tata Power and Adani to raise tariffs, benefiting the two power producers but negative for NTPC.

At 11:00 a.m.; NTPC was trading 9.5 per cent lower at Rs 119.50 and was also the top loser on Sensex and Nifty. It hit a low of Rs 116.95 and a high of Rs 129.60 in trade today.

According to a Reuters report, the impact for NTPC is seen as negative because the CERC has at the same time tightened incentives on capacity utilisation and tax treatments for the state-owned company, according to analysts.

CERC’s final tariff regulations for FY15-19 are broadly in line with draft regulations but are negative for earnings of NTPC and Power Grid, CLSA said in a report.

Earning of incentives has been linked with utilisations of generation plans instead of availability (PAF) which will hit NTPC’s earnings in the current scenario of low demand, added the CLSA report.