Coal India, NTPC gain up to 3% on Credit Suisse upgrade

Shares of Coal India and NTPC surged up to 4 per cent on Tuesday after the global brokerage firm Credit Suisse upgraded CIL and NTPC to "outperform" from "neutral".

CIL ended the day at Rs 342.75, up 4.02 per cent, while NTPC settled in red at Rs 125.75, down 1.30 per cent after gaining as much as 2.04 per cent to Rs 130 on the Bombay Stock Exchange (BSE).

"The likely resolution of state electricity board (SEB) problem will remove a big overhang and the valuations for both the stocks now look attractive," said analysts Neelkanth Mishra, Ravi Shankar and Prateek Singh.

"Receding risk of contagion from SEBs credit worthiness will help NTPC," pointed out analysts Lokesh Garg and Vaibhav Jain.

As per the media reports the state governments may take over the entire debt of power distribution companies.

India's panel of ministers is meeting on Wednesday to consider the proposal, added media reports citing sources.

"Financial restructuring may lead to upgrade of loans to standard category," said analysts.

"State government guarantee may also reduce the risk weightage of the loans," analysts added.