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BHEL, ONGC, NTPC, SAIL rally up to 9% on May 03. What's behind the rise?

At 10:08 am; the CPSE index, the top gainer among broader indices, was up 1.4 per cent, as compared to 0.16 per cent rise in the S&P BSE Sensex

Bhel

Bhel

Deepak Korgaonkar New Delhi

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Shares of Central Public Sector Enterprises (CPSEs) are in focus, with the S&P BSE CPSE index hitting a new high of 3,978.19, surging over 1 per cent on the BSE in Friday’s intra-day trade, after a strong rally in state-owned stocks.

At 10:08 am; the CPSE index, the top gainer among broader indices, was up 1.4 per cent, as compared to 0.16 per cent rise in the S&P BSE Sensex. In the past six months, the index has zoomed 71 per cent, as against 16.5 per cent rally in the benchmark index.

Bharat Heavy Electricals (BHEL), Oil and Natural Gas Corporation (ONGC), MOIL, Steel Authority of India (SAIL), Power Finance Corporation (PFC) and NTPC have rallied between 2 per cent and 9 per cent. MOIL, PFC and NTPC are trading at their respective record high levels, while the remaining are quoting at their multi-year high levels.

The S&P BSE CPSE index is designed to measure the performance of CPSEs listed on BSE. CPSEs are companies for which 51 per cent or more of the direct shareholding belongs to the Central Government of India.

Among the individual stocks, BHEL soared 9 per cent to Rs 318.15 in intra-day trade today. In the past two trading days, it rallied 13 per cent after the company on Tuesday announced that it has entered into a strategic partnership agreement with HIMA Middle East FZE, Dubai for railway signalling business. The stock is trading at its highest level since March 2012. It had hit a record high of Rs 390 on November 7, 2007.

BHEL has operations in the power and industry segments. The power group supplies power plant equipment such as turbo generators, boilers, turbines and accessories, and erects all types of plants based on gas, coal, hydro, nuclear and solar power. The industry group caters to diverse sectors such as process industries, transportation, power transmission and distribution, and defence. BHEL designs, engineers, manufactures, constructs, tests, commissions and services a wide range of products.

Meanwhile, shares of PFC hit a new high of Rs 485.30, up nearly 4 per cent in intra-day trade today. In past two trading days, the stock of a state-owned financial institution has rallied 10 per cent.

PFC is a critical vehicle for government to drive policy implementation in the power sector and has been the nodal agency for various government schemes such as Liquidity Infusion Scheme (LIS) and Late Payment Surcharge Scheme (LPS) and as a bid process coordinator through its subsidiary PFC Consulting Limited for the ITP scheme.

The Government of India (GoI) had announced, Revamped Distribution Sector Scheme (RDSS) reforms-based and results-linked scheme with an outlay of Rs 3.04 trillion over a period of five years, which would be available till fiscal 2026.

REC Ltd (REC) and PFC have been appointed as nodal lending agencies for facilitating the implementation of this scheme. The scheme aims to improve operational efficiencies and financial sustainability of distribution companies (discoms) by providing reform-linked financial assistance for strengthening the supply.

In fiscal 2022, GoI announced the LPS scheme to address dues of discoms to generation and transmission companies. PFC has extended financial assistance to various discoms under the rules, to clear their outstanding dues. PFC, along with REC shall act as the nodal agency to monitor implementation of these rules.

Meanwhile, shares of REC also hit a new high of Rs 565, up 2 per cent in intra-day trade today and rallied 11 per cent in the past two trading days. ONGC hit a multi-year high of Rs 292.95, surging nearly 4 per cent in intra-day deal. The stock of oil exploration and production company is trading close to its record high level of Rs 314.67 touched on June 9, 2014.

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First Published: May 03 2024 | 10:42 AM IST

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