Shares of PSU Maharatna company Power Grid Corporation of India recovered before closing on Monday, after declining for the seventh straight trading session in the early morning trade on the BSE. The stock moved from the day's low after the Finance Ministry clarified that there is currently no proposal to have Power Grid acquire Power Finance Corporation's stake in REC Ltd.
After falling over 8 percent, shares of Power Grid climbed over 3 percent just before the market closed. The shares closed at Rs 201, 0.6 percent down from the previous close on the BSE.
Sources from the Finance Ministry told CNBC-TV18 that there is currently no proposal to have Power Grid acquire PFC's stake in REC. The Power Minister is likely to issue a clarification on this soon.
Earlier brokerage firm Jefferies had said in a note that media reports indicate that Power Ministry is in talks with Power Grid (PGCIL) to purchase PFC’s 52.63 percent stake (Rs144 billion) in REC.
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Analysts at Jefferies believe PFC should prioritise financing power projects with stake sale proceeds, and added that Power Grid has enough cash and a positive outlook for transmission spending growth in the near- and medium-term.
As per Jefferies observation, the purchase of PFC's stake in REC was a near-term dampener and could adversely impact FY23-25E earning per share by 3-5 percent.
Shares of Power Grid have been losing for the last 7 days and, the stock has fallen by 15.33 percent in the period.
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