Shares of power, bank and sugar companies reacted positively as the Supreme Court (SC) struck down RBI's February 12 circular.
The Supreme Court on Tuesday struck down Reserve Bank of India's (RBI's) February 12, 2018, circular on bankruptcy proceedings in a major relief to stressed banks and power companies.
The RBI circular directed lenders to refer loan accounts of over Rs 2,000 crore under the Insolvency and Bankruptcy Code if they are not resolved in 180 days of default.
A two-judge bench of justice Rohinton Fali Nariman and justice Vineet Saran pronounced the judgement while hearing a bunch of petitions on the maintainability of the RBI circular.
Sameer Kalra - Equity Research Analyst & Founder Target Investing said, "This is an important judgement as the circular was a big overhang on power sector and lenders of the sector. Relief from this circular will give big benefit to Power Finance Corporation which have recently taken over REC as well."
"Also this will provide breather to PSU Banks especially SBI as it is big lender to the sector. We have buy rating on SBI," he added.
At 10:58 hrs State Bank of India was quoting at Rs 326.55, up Rs 3.75, or 1.16 percent and Power Finance Corporation was quoting at Rs 123.25, up Rs 3.65, or 3.05 percent.
KSK Energy Ventures was quoting at Rs 0.91, up 4.60 percent, and RattanIndia Power was quoting at Rs 2.96, up Rs 0.25, or 9.23 percent.
Triveni Engineering and Industries was quoting at Rs 65.00, down Rs 1.25, or 1.89 percent.
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