Power utilities fall on draft guidelines for sector

Shares of electric utilities drop after the power regulator tightened certain rules for tariffs and operations for the sector in its draft 2014-19 guidelines.

The guidelines were posted on the Central Electricity Regulatory Commission (CERC) website late on Monday.

NTPCslumps 11 percent, Power Grid Corporation of Indiafalls 3.4 percent, while Tata Powerdeclines 1.5 percent.

Also Read:NTPC plummets on draft power norms; 10% earnings hit seen

Analysts say the guidelines tightened some operational parameters, reducing the use of financial incentives for achieving transmission and generation targets.

The guidelines also propose that some of the savings from fuel costs be partially passed on to consumers.

Analysts warn the proposals could hit returns for the companies. The rules need to be finalised by March.