RELINFRA(Rs.1174) Short term bearishness

Maharashtra Electricity Regulator (MERC) has ordered an investigation into R-Infra’s power purchase transactions, accuracy of meters and steep increase in capex and operating expenses. Investigation will focus on RInfra’s failure to sign PPA which has allegedly led to increase in power cost, sharp increase in capex without corresponding increase in sales and inadequate break-up of regulated and un-regulated businesses. R-Infra’s Delhi distribution entities are also facing some flak for sharp increase in bills, though R-Infra has provided explanations. There is potential for earnings downside due to this investigation.

RELINFRA(Rs.1174) Short term bearishness if the stock fails to cross Rs.1230 and below Rs.1120 more panic sell-off can be seen