Power stocks rally on FSA; Adani Power, JSW Energy up 3%

NEW DELHI: Shares of power generation companies surged in early trade on Wednesday in an otherwise weak market after the government issued a presidential decree to force Coal India to guarantee long-term fuel supply to private power firms.

The government directive, issued after hectic lobbying by top industrialists such as Ratan Tata and Anil Ambani to ensure predictable supplies of coal, mandates that CIL will have to pay penalties if it fails to supply 80% of its commitment.

But it also gives breathing space to the PSU by leaving it to the board of directors to decide what the penalty will be.

The decree will help power firms run idle plants, sell electricity and secure finance. It will help idle thermal plants with a total capacity of 28,000 mw that have been built by last December, and another 22,000 mw that will be constructed in the next three years.

At 10:15 a.m., shares of Adani Power Ltd, JSW Energy Ltd surges over 3% followed by Tata Power Company Ltd, Reliance Power Ltd, CESC Ltd and Torrent Power Ltd are trading higher by 2-3% on BSE.