6 Mar 2024
Suzlon Energy and Inox Wind shares continued their downward spiral for a third consecutive day, hitting lower circuits on the Bombay Stock Exchange (BSE) on Wednesday, March 6th.
What's Causing the Downturn?
The recent slump is attributed to concerns surrounding the Ministry of New and Renewable Energy's (MNRE) decision to potentially reintroduce "reverse auctions" for allocating wind power capacity to energy companies.
Breaking Down the Lingo:
Reverse Auctions: This bidding process allows companies to continuously lower their bids until a single, unchallenged offer remains.
Concerns for Investors: Investors are worried that the return of reverse auctions could lead to:
Lower profit margins for wind energy companies like Suzlon and Inox.
Increased competition within the wind power sector.
Impact on Share Prices:
Suzlon Energy: The stock price fell by 5%, closing at ₹38.70.
Inox Wind: The stock price also dipped by 5%, closing at ₹498.80.
Looking Ahead:
The MNRE's final decision regarding reverse auctions and its potential impact on the wind energy sector remain to be seen. Investors are closely monitoring the situation, and the coming days could be crucial for both Suzlon and Inox shares.