
CLSA maintains a favorable view on power financiers REC and PFC, particularly following the resolution of key stressed assets. Both companies have exposure to KSK Mahanadi, with REC’s exposure at ₹2,727 crore and PFC’s at ₹3,428 crore. Both have provisioned for these exposures and had been guiding for substantial recovery.
The recent acquisition of KSK Mahanadi by JSW Energy for ₹160 billion—28% higher than the previous highest bid—marks a significant step toward asset resolution. Other notable assets under resolution include Sinnar Thermal, Hiranmaye Energy, and Bhadreshwar Vidyut. CLSA continues to favor REC and PFC, citing their strategic positions in the power sector and potential benefits from ongoing resolutions.
Market reactions have been positive; shares of REC and PFC gained up to 5% following the announcement of the KSK Mahanadi resolution. Additionally, ICICI Securities has initiated coverage with ‘Buy’ ratings, further bolstering investor confidence.