As giants turn away, a shadow looms over Power Finance Corp

From the investor's mind

Kumar Saurabh observed that in the tiles industry, where gas is a critical input material, many small and unorganized companies have been forced to shut down. This comes after these businesses were already weakened by prolonged industry headwinds. Saurabh suggests that these shutdowns may have led to significant shifts within the industry.

Word in the street

Power Finance Corporation Limited

A shadow of doubt crept over Power Finance Corporation this week, a company with a market capitalisation of about 124,430 crore. The chatter focused on the shifting loyalties of India's energy giants. While the stock has fallen 5.46 percent in the last year, a deeper concern is emerging about its long term moat. Some of the country's largest power players, like Reliance and NTPC, rarely borrow from PFC. Even former borrowers like Adani Power have increasingly turned to local and foreign bond markets. This trend has raised a difficult question: if India's biggest names can raise money at PFC’s own cost of funds, why would they borrow from it for their ambitious new projects?

Yesterday's big moves

“It was never my thinking that made the big money for me. It always was my sitting.”

Jesse Livermore