Mumbai: Leading power scrips such as Tata Power, Bharat Heavy Electricals (BHEL), ABB, Alstom Power and BSES have started a northward journey in anticipation of the Electricity Bill being cleared during the budget session of the Indian Parliament which starts on 17 February 2003.
Since the end of January 2003 all these scrips have witnessed a growth of over 8 per cent. The Bill focuses on improving the state electricity boards (SEBs), getting further foreign direct investment in the power sector and opening the power distribution and transmission sector fully to the private players.
The ABB scrip moved up to Rs 299.65 from a low Rs 256 as on 27 January, registering a gain of around 17.05 per cent. Similarly, BHEL has touched a three-year high of 204 before closing at Rs 195.25 on 4 February. The scrip, since the end of January 2003, has jumped by 6.55 per cent. Alstom Power has also jumped 4.13 per cent to Rs 54.15 from Rs 52.04 on 27 January.
Power trading company Tata Power has turned favourite, with the company scrip touching Rs 117.50 from Rs 112 as on 27 January, registering an increase of 5 per cent.
''Since ABB, BHEL and Alstom draw a bulk of their revenues from SEBs, the passage of the Bill is likely to help them recover a substantial part of their receivables. The passage of the Bill is due for some time now. But we do not think there should be any opposition to it this year,'' says a senior SBI Caps analyst.
The Bill is also expected to spur many power projects off the ground. It will pave way for the existing power projects, which have been put on the backburner, and encourage new ones to come up, he adds.
A senior official with Tata Power says those in the power sector are rejoicing at the fact that this Bill is well contrived and addresses all the issues raised by the concerned players in the industry. ''What is more important, it moves the power restructuring programme ahead, and the feel-good factor is positively generated. What it does is to give the foreign direct investor a positive feeling that the Indian power managers want to provide conditions conducive to their operations in India. The Indian institutional investors would also feel encouraged to invest in this sector where investments are a dire need. This in effect would ease the extreme financial pressures encountered by the SEBs.''
Rohita Sharma, power analyst, Pranav Securities, says: ''The upsides will remain for the next two to three weeks, especially for the top-rung power companies.''
According to Umesh Kamath, equity fund manager, CanBank, the Bill would give freedom to more corporates to sell power directly to the consumers. ''Currently, BSES and Tata Power are the only two private sector companies selling power directly to the consumers.''