Power sector turns attractive for funds

Reliance Natural Resources Ltd, Tata Power, Reliance Energy,
NTPC, GVK Power Infrastructure etc have all joined the stock
market rally since the past couple of days, thus giving a cue to
the others in the sector to follow.

Upward rally

NTPC was at an all time high yesterday at Rs 228.90 and has
gained 16.76 per cent since a week, whereas Reliance Energy has
gained 32.28 per cent since a week and RNRL has gained 7.44 per
cent since a week and rallied with jet speed as it has gained
almost 90 per cent since a month.

The trigger point for the power sector towards the upward rally
has come in the form of upcoming IPOs, feel analysts.

Investors favourite

Uptil now it was the technology sector which was a favourite
amongst investors but now with the rupee appreciation the favour
has turned towards the power sector leading the funds to flow in
this sector, said Anita Gandhi, Head of Institutional Business,
Arihant Capital Markets.

The Reliance Energy IPO, which is expected to be one of the
biggest, and the PowerGrid IPO have brought in a positive
sentiment and outlook towards the power sector, the stocks of
which were underperforming for a long while, says an analyst with
a brokerage firm based in Mumbai.

PowerGrid listing

The PowerGrid is listing its shares on the bourses on Friday.

The IPO got subscribed 64 times and brought in subscriptions
worth Rs 1,90,000 crore and worth over Rs 1,20,000 crore in
overseas subscription. Power is a key sector for the growth of an
economy and as there is huge gap between demand and supply, the
growth prospects seem strong, said an analyst.

The Government has gone in for power sector improvement as
earlier they were not accepting many bids but now there seems to
be substantial volumes in this case, feels an analyst.

Promising scenario