Power Grid shares touch an intraday high of over 3% after Centre's rejection of stake sale plan

Shares of PSU Maharatna company Power Grid Corporation of India recovered on Tuesday, September 27, after falling over 12 percent in the past five days. The stock climbed out of the red zone after the Finance Ministry clarified on Monday that there is currently no proposal to have Power Grid acquire Power Finance Corporation's stake in REC Ltd.

At 12:01 pm, shares of Power Grid Corporation were trading at Rs 205, up by 1.8 percent from the previous close on the BSE. The stock opened with a gain of 2.76 percent and touched an intraday high of 3.33 percent at Rs 207.95 on the BSE.

Sources from the Finance Ministry told CNBC-TV18 that there is no proposal to have Power Grid acquire PFC's stake in REC, but the Power Minister is likely to issue a clarification soon.

“In fact, PFC acquired REC stake, which the government was holding in December 2018, and after that overall REC has been functioning as a subsidiary of PFC. However, the government had direct control over REC and in the meanwhile, there were options that were explored in terms of who else could be suited for REC. But in the balance of things, yesterday, the power ministry took a call that the status quo would be maintained. As per the latest clarification, it is off the table,” R Lakshmanan, ED of REC, told CNBC-TV18.

Earlier, brokerage firm Jefferies had said in a note that media reports indicate that power ministry is in talks with Power Grid to purchase PFC’s 52.63 percent stake (Rs144 billion) in REC.

Shares of Power Grid have been losing for the last seven days and the stock has fallen by 15.33 percent in the period.