MERC ruling electrifies Reliance Energy

DALAL STREET SPIKES

Reliance Energy was among the biggest gainers in the Sensex stocks as the market reacted positively to the MERC directive which ordered Tata Power to pay Rs 322 crore to Reliance Energy as standby charges.

The stock in today's trading gained 8.76 per cent to close at Rs 537.70 on back of strong volumes of 5.66 lakh shares at the Bombay Stock Exchange.

On the other hand, Tata Power slumped 6.59 per cent to close at Rs 247.45. Market analyst said, the MERC directive is positive news for Reliance Energy as it will witness a cash inflow of Rs 322 crore.

MERC has directed Tata Power to refund Rs 322 crore to REL against standby charges over the period 1998-99 to 2003-04. Reliance Energy's share in the standby charges was Rs 515.60 crore as per the ruling and since the company actually paid excess charges including deposit of Rs 837.90 crore to Tata Power, it is entitled to a refund, the order said.