Adani Power spurts on report Mundra plant gets CERC relief

Adani Power rose 7.43% to Rs 32.55 at 11:16 IST on BSE on reports the electricity regulator has granted the company full compensation for the rise in the cost of electricity generation at its thermal power plant at Mundra, Gujarat.

Meanwhile, the S&P BSE Sensex was up 119.48 points, or 0.39% to 30,441.60.

On the BSE, 34.68 lakh shares were traded in the counter so far, compared with average daily volumes of 18.31 lakh shares in the past one quarter. The stock had hit a high of Rs 33.70 and a low of Rs 30.50 so far during the day. The stock hit a 52-week high of Rs 46.30 on 11 April 2017. The stock hit a 52-week low of Rs 23.35 on 9 November 2016.

The stock had underperformed the market over the past one month till 15 May 2017, falling 7.76% compared with 2.92% rise in the Sensex. The scrip had also underperformed the market in past one quarter, falling 16.07% as against Sensex's 7% rise.

The large-cap company has equity capital of Rs 3856.94 crore. Face value per share is Rs 10.

According to reports, the Central Electricity Regulatory Authority (CERC) has granted Adani Power full compensation for the rise in the cost of electricity generation at its 4,620-megawatts (MW) thermal power plant at Mundra, Gujarat due to increased domestic levies on imported coal.

The regulator's decision comes after the Supreme Court ruling on 11 April 2017 that said power firms cannot get relief for any adverse fallout from policy changes effected by a foreign government, but expanded the scope of reliefs under the change in law provision in the domestic context.

The Supreme Court (SC) on 11 April 2017, set aside an earlier Appellate Tribunal for Electricity (Aptel) ruling that allowed Tata Power and Adani Power to charge compensatory tariff from consumers. A bench comprising justices Pinaki Chandra Ghose and Rohinton F. Nariman ruled in a batch of appeals filed against an April 2016 ruling of Appellate Tribunal for Electricity (Aptel) which held that an unforeseen increase in the cost of coal would be a force majeure event under the power purchase agreements (PPAs) between power generating companies and distributors. Supreme Court (SC) said higher tariffs could be allowed only if there was a change in Indian laws.

Tata Power's wholly-owned subsidiary Coastal Gujarat Power (CGPL) and Adani Power's Mundra project in Gujarat have PPAs with state discoms in Rajasthan, Gujarat, Haryana and Punjab. Both generating plants are fueled by coal imported from Indonesia.

On a consolidated basis, Adani Power reported net loss of Rs 323.61 crore in Q3 December 2016, compared with the net profit of Rs 109.49 crore in Q3 December 2015. Net sales declined 6.15% to Rs 5803.52 crore in Q3 December 2016 over Q3 December 2015.

Adani Power is the largest private thermal power producer in India with an installed capacity of 10,480 MW.

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