PSU stock crash: Today saw losses in shares of Rural Electrification Corporation and Power Finance Corporation (PFC).
PSU stock prices plummeted today, with some of them falling as much as 13% in response to the Reserve Bank of India’s (RBI) proposal for more stringent rules on ongoing projects.
The RBI mandates that all project loans, both new and old, have a 5% general provision set aside for the construction phase. According to the RBI, these provisions can be lowered to 2.5% of the remaining investment after a project enters the operational phase and, in certain cases, to 1%.
Today, the shares of IREDA saw a notable decrease of about 7%, while the shares of power financing companies, such as Power Finance Corporation (PFC) and Rural Electrification Corporation, saw declines of 13% and 13.6%.
In today’s trade, PSU banks saw significant losses: Canara Bank, Punjab National Bank, Bank of Baroda, and Bank of India all saw losses of more than 5%. The Nifty PSU index dropped 4.3% to 7,202 points, while the remaining eight components of the index are all trading down.
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