Shares of power companies have rallied in the range of 3 to 5 per cent in the early trade on Bombay Stock Exchange (BSE) on buzz that the government of India will allow a tariff hike up to Re 1 per unit for power projects using imported coal to offset the effect of increase in fuel price due to additional taxes or changes in law by the governments of source countries.
The changes made in tax laws by source countries such as Australia and Indonesia, have raised fuel costs for all imported coal-fired power projects, even those that were based on supplies from captive mines in these countries.
Power Index is trading higher by almost 2 per cent compared to less than 1 per cent increase in the broader benchmark Sensex.
Among the individual shares, Tata power is trading at Rs 97.60, up 3.66 per cent; JSW Energy is at Rs 48.90, up 3.82 per cent; Adani Power is up over 5 per cent at Rs 49.45.
Meanwhile, the broader benchmark Sensex was quoting at 16,862.09, up 143.22 points at 10:55 hours.