New bankruptcy rules to hit banks

during the insolvency process. The move also barred the guarantors of the NPA from bidding for it.

While some experts have welcomed the ban as it sends a strong signal against crony capitalism, where promoters try to milk the banks, the market participants believe that the move will push banks into further losses.

“The absence of promoter bids could potentially increase losses for banks during the recovery process as competition would lessen,” said analysts at Kotak Securities.

“Our initial reading and recent meetings with various stakeholders suggests that the promoters in at least most of the large steel companies were quite intent to regain control and did appear to offer the most competitive bid during the resolution process. The probability of a higher bid during the resolution process now needs to be tempered,” said the analysts, adding that loss given default on loans would rise against which banks would need to set aside higher provisions.

Experts also believe that the resolution process could be delayed as fresh bids would have to be called for and there are also possibilities of promoters initiating litigation against the law. Buoyed by the success of reverse auction of renewables, the Union ministry of new and renewable energy on Friday announced that the auction of up to 21 GW solar and wind capacities by March 2018.

The ministry will put on the block 3-4 GW wind power capacities during third and fourth rounds by March 2018. Each round will be of 1.5-2 GW each, said power and new and renewable energy minister R.K. Singh during a media interaction here on Friday.

The ministry has approved a scheme for setting up of 2,000 MW wind power projects.

The scheme seeks to facilitate fulfillment of non-solar renewable purchase obligation (RPO) requirement of Discoms of non-windy states through supply of wind power at a price discovered through transparent bidding process and to encourage competitiveness in wind power sector.

It has also decided to put for bidding 10 GW wind capacities each in 2018-19 and 2019-20 to meet the target of 60 GW by 2022. At present, wind power installed capacity is 32 GW.

As far as solar auction is concerned, the government is looking at 17 GW capacities by March 2018. So far, 3.6 GW solar capacities have been auctioned.

To meet the milestone of 100 GW of solar capacity by 2022, the Centre will go in for auction of 30 GW solar capacities each in 2018-19 and 2019-20.

“(We) will think about imposing customs duty on solar equipment once we develop our domestic manufacturing capacity,” he said, adding that India can cross its 175 GW target by the year 2020.

Wind power tariff had dropped sharply to an alltime low of `2.64 per unit during the second auction by the SECI for 1 GW projects in October.

Solar power has seen a similar play where the tariff had dropped to a record low of `2.44 per unit in a tariff-driven bidding earlier this year.