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Market round-up: Allocation to India by Asia ex-Japan funds down

LiveMint logoLiveMint 26-07-2017 Livemint

Allocation to India by Asia ex-Japan funds came down to 13% in June from 13.3% in May, according to Kotak Institutional Equities’ latest foreign fund-flow tracker. The measure was at 13.6% in April. Fund allocation to India by global emerging market (GEM) funds came down to 10.8% from 11% earlier. “Allocation by Asia ex-Japan non-ETF (exchange-traded funds) funds to India came down to 13.7% from 13.9% in the previous month,” said Kotak, adding that allocation to India by GEM ETF funds remained around 9.8%. Allocations to India and China constitute more than one-third of the average Asia ex-Japan fund portfolio.

Naveen Kumar Saini/Mint

EVs can alleviate utilities’ financial pain

Electricity demand from electric vehicles (EVs) can bring financially strapped power distribution companies additional revenue of about Rs70,000 crore a year, sufficient enough to cut their financial deficit by at least half, Lawrence Berkeley National Laboratory, a US department of energy national lab managed by the University of California, said in a report. According to the report, India’s electric car sales can reach 10 million a year in 2030, if all new sales in that year were EVs. The total EV fleet, including two-wheelers, is projected to grow to 144 million. This can add 6% of peak electricity demand in 2030. The energy load may not sound much in percentage terms. But Nikit Abhyankar, lead author of the report, says it would be a good way for financially stressed utilities to earn additional revenue.

Subrata Jana/Mint

Wind capacity additions may fall sharply this year

From about 5,400 megawatts (MW) last fiscal year, wind energy capacity additions may drop to 1,000-1,500MW this year, India Ratings and Research Pvt. Ltd said in a note. Wind power auctions early this year sent tariffs to record lows. This made state power distribution companies (discoms) wary of signing power purchase agreements at relatively expensive feed-in-tariffs, which have been the norm till then. Combine this with their unpreparedness to come out with auctions in a big way in the near term, wind power capacity additions are estimated to see a sharp slowdown in the current year. According to the ratings agency, auctions may pick up from the next fiscal year onwards. Feed-in-tariffs are bilateral contracts between discoms and wind power generators. Discoms are expected to shun these bilateral contracts in favour of auctions to acquire wind energy.

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