RInfra jumps after MERC OKs recovering past arrears

Reliance Infrastructure jumped 3.94% to Rs 357.75 at 15:09 IST on BSE after the company said it received an approval from the Maharashtra Electricity Regulatory Commission to recover past arrears aggregating to Rs 5550 crore over the next six years.

The announcement was made during trading hours today, 23 August 2013.

Meanwhile, the BSE Sensex was up 196.58 points, or 1.07%, to 18,509.52

On BSE, 12.46 lakh shares were traded in the counter compared with average volume of 6.43 lakh shares in the past one quarter.

The stock hit a high of Rs 361.15 and a low of Rs 339.65 so far during the day. The stock hit a 52-week low of Rs 308 on 2 August 2013. The stock hit a 52-week high of Rs 572.35 on 10 January 2013.

The stock had underperformed the market over the past one month till 22 August 2013, sliding 10.93% compared with the Sensex's 9.16% decline. The scrip had also underperformed the market in past one quarter, falling 15.64% as against Sensex's 8.72% fall.

The mid-cap company has an equity capital of Rs 262.99 crore. Face value per share is Rs 10.

Reliance Infrastructure (Rlnfra) announced that as per the Maharashtra Electricity Regulatory Commission (MERC) order dated 22 August 2013, RInfra has been allowed to recover past arrears, along with 14.5% per annum carrying cost, at Rs 925 crore per year, aggregating to Rs 5550 crore over the next 6 years.

The MERC has also allowed RInfra to recover revised Cross Subsidy Surcharge (CSS) of Rs 819 crore for the current fiscal year ending March 2014, Rs 896 crore for the fiscal year ending March 2015 and Rs 590 crore for the fiscal year ending March 2016.

According to the MERC order, revised tariff, the arrears recovery and revised CSS will become effective from 1 September 2013. RInfra's tariffs are most competitive across all major categories, and this will ensure major inflow of high-end consumers back to RInfra, the company said in a statement.

Notwithstanding the above, RInfra's tariffs are expected to reduce by 12% and 11% in the next two financial years, benefitting its valued cuslomers significantly, mainly owing to efficient and low power procurement cost by RInfra, the company said.

RInfra is the largest power distribution licensee in Mumbai, with 25 years license to distribute electricity in its licensed distribution areas spread over 400 square kilometres in the suburbs and surrounding areas of Mumbal, and supplying power to around 29 lakh consumers.

Reliance Infrastructure's consolidated net profit rose 0.78% to Rs 415.20 crore on 1.28% growth in total operating income to Rs 5452.45 crore in Q1 June 2013 over Q1 June 2012.

RInfra is the largest infrastructure company developing projects, through various Special Purpose Vehicles (SPVs), in several high growth areas in the Infrastructure sector i.e. roads, metro rail, and cement. The company is also the leading utility company having presence across the value chain of power businesses i.e. generation, transmission, distribution, trading and EPC. The SPVs are inter alia developing a metro rail project in Mumbai; eleven road projects with total length of 1,000 kilometres; and developing 2 cement plants of capacity of 5 million tonnes per year each in Maharashtra and Madhya Pradesh. RInfra along with its wholly owned subsidiary generates over 940 MW of power through its five power stations; distributes power to over 60 lakh consumers in Mumbai and Delhi and is developing 5 transmission projects including the first independent private transmission projects.

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