Reliance Infra gains post MERC allows co to raise tarriff

Moneycontrol Bureau

Reliance Infrastructure jumped more than 4 percent in early trade Friday after MERC allowed the company to increase average tariff for FY14. However, the stocks trimmed gains later on.

Maharashtra Electricity Regulatory Commission (MERC) has allowed the company to increase average tariff for FY2014 by a marginal 0.18 percent as against the company's demand of around 12 percent increase.

Meanwhile, Bank of America Merrill Lynch has a buy rating on the stock with a target price of Rs 816.

"The regulator's decision last month to raise cross subsidy surcharge should lead to reverse migration of consumers to the company and would lead to a recovery of Rs 5500 crore," Bank of America Merrill Lynch report said.

Also Read - Reliance Infra's Q1 net almost flat YoY, rev up 1%

At 11:09 hours IST, the stock was up 0.5 percent at Rs 345.90 on the Bombay Stock Exchange. It had surged 8.6 percent on Thursday.