Power stocks fall up to 7 per cent on SC order on coal allocation

Mumbai: Power sector companies’ shares continued to witness selling pressure falling as much as 7 per cent on Tuesday, after the Supreme Court held that all coal block allocations since 1993 till 2010 before pre-auction era during UPA and NDA regimes have been done in an illegal manner.

Power companies depend heavily on coal to run smelters and generate electricity. Shares of Reliance Power tumbled 6.79 per cent, while Adani Power lost 6.44 per cent on the BSE. Among others, Tata Power fell by 2.77 per cent, NHPC by 1.87 per cent, Torrent Power by 1.84 per cent and NTPC by 0.63 per cent.

“Shares of power generation and power distribution companies extended Monday’s losses triggered by a Supreme Court ruling that all coal mining licenses distributed since 1993 are illegal,” said Jayant Manglik, president - retail distribution, Religare Securities.

The Supreme Court on Tuesday held that all coal block allocations made since 1993 till 2010 before pre-auction era during previous NDA and UPA regimes have been done in an illegal manner by an “ad hoc and casual” approach “without application of mind”. However, the consequences arising from the verdict of such coal blocks will be considered after further hearing by the apex court.