Revenue prospect buoy power stocks

Wed, 23 Dec 02:30 pm

   Previous Close   

   Pre-Open   

   10:30 am   

   12:30 pm   

   Closing   

The markets continued their northbound journey on account of sustained buying activity across heavyweights during the previous two hours of trade. Though stocks across sectors are witnessing investor interest, those from the oil & gas, power, metal and IT sectors are leading the pack of gainers.

The BSE-Sensex and NSE-Nifty indices are trading higher, up by 488 points and 147 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading higher, up by 1.4% and 1.5% respectively. The rupee is trading at 46.82 to the dollar.

According to a leading business daily, the deputy chief of Planning Commission, Mr Montek Singh Ahluwalia believes that on schedule auction of 3G spectrum promises to bring a lot of investment to the telecom sector in the next 12 to 18 months. This will also trigger fund flows to other infrastructure related areas like ports and roads. It may be noted that 3G spectrum auctions are scheduled on 14th of January, 2010. Also allotment will be made to four private players simultaneously by August. This comes as a relief to the telecom sector which has witnessed a lot of uncertainty regarding the much coveted 3G auction in terms of schedule and number of slots to be alloted.

It other news, the telecom companies are slated to miss the deadline of 1 January for the implementation of number portability - the facility wherein the users can change their telecom operators without having to change their numbers. The private telecom players are blaming the government for the delay. They believe that government is failing to carry out comprehensive tests required to ensure proper operations post the implementation. The government has neither finalised the test schedule nor the processes required to address the security concerns about portability. We believe such delays not only impact the telecom players, they also impact the revenues that the government can generate from telecom industry.

As per a leading business daily, the government is considering a proposal to allow power utilities to sell a part of unallocated generation capacity in the open market. This power sale will occur at market determined prices. This open access system will put forth a transparent power market where consumers will be able to source their electricity needs from any source, from any part of the country without any regulatory or geographical restrictions. Though such system is already in place, lack of clarity on pricing and other regulatory issues has limited it only to captive power plants. This new proposal might bring in additional revenue to power companies like NTPC , Power Grid etc. which will be allowed to sell up to 50% of government's unallocated generation capacity in new plants to open access consumers at market price determined by competitive bidding.