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Essar Energy shares lose power again

The Indian power provider says the regulatory environment at home is ‘improving’ – but that’s unlikely to happen before its shares crash out of the FTSE 100

Another day, another share price plunge for Essar Energy, the Indian power provider that was last year’s worst performer in the FTSE 100 index.

Monday’s fall of 15% was caused mainly by a profits shortfall at the oil-refining division and a delay to three power projects.

That added to a miserable year in which India’s supreme court ruled that a .25bn tax bill could not be deferred until 2021; important permits to mine coal in India were delayed; and billionaire chairman Ravi Ruia stepped down to concentrate on fighting allegations relating to telecoms licences in another part of parent Essar Group’s empire.

In its search for some cheery news, Essar Energy, 77%-owned by Essar Group, said the regulatory environment in India was “improving”.

That’s good to hear, but you can’t blame investors for wanting to see some evidence in the form of a specific benefit to Essar. It’s a safe-ish bet that it won’t arrive before Essar, with its shares down 75% since flotation in 2010 and its market valuation down to £1.4bn, slips out of the FTSE 100. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds