While the Hydro Frenzy is at its Highest, Hydropower Sector's Regulator Issues a Note of Caution

Thu, Aug 19, 2021 8:38 AM on Stock Market, Latest,

The Electricity Regulatory Commission's attention has been drawn to news circulated across platforms that the promoters of hydropower companies have caused unnatural stock price hikes in shares of hydropower companies.

The commission states that it is a normal principle of the capital market that an investor should only invest in companies that have sound financials. Thus, it is the responsibility of companies listed on the exchange to unveil accurate information. The commission has stated that it will take strict action against any hydropower company unveiling incorrect financial reports with the hidden intent to mislead investors.

The Electricity Regulatory Commission has requested shareholders to invest in hydropower companies after properly ascertaining their technical and fundamental health, and correctly anticipating the expected returns. Since investors have varying investment strategies, the commission has requested investors to have a risk management strategy according to their respective strategies.

Furthermore, the commission has also clarified that no decision has been taken so far on allowing the companies to issue the right shares to repay the loan of the project. The commission has stated that only the draft of the revised directive has been made public so far. Thus, the provisions mentioned in the draft may or may not be included in the final guideline.

The Electricity Regulatory Commission has unveiled a checklist to ensure the financial health of hydropower companies. The checklist is attached below:

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