Tata Power gains as JV to acquire 2 power plants from Tata Steel

Tata Power said joint venture firm signed pacts with Tata Steel to acquire a captive gas-based power plant and a diesel project in Kalinganagar, Odisha for around Rs 920 crore.

Tata Power said that Industrial Energy (IEL), a joint venture between the company and Tata Steel (TSL), has signed the asset purchase agreements with TSL on 24 October 2019 for acquisition of 120 MW captive gas-based power plant and 40 MW diesel generating station at Kalinganagar.

The company informed that the captive gas-based power plant is under construction and will be operational by FY2022, while the diesel generating station is already operational.

The combined value of the transactions is approximately Rs 920 crore while the purchase consideration to acquire the said assets based on current progress is Rs 294 crore (inclusive of taxes and duties), subject to minor adjustments on closing and applicable taxes and duties.

The company added that IEL has also signed tolling agreements with TSL for supply of power for a period of 30 years from the commencement date of captive gas-based power plant and 15 years from the date of purchase of diesel generating station.

Tata Power was trading 1.29% higher at Rs 59.05. It hovered in the range of Rs 58 and Rs 59.25 so far during the day.

On the BSE, 3.31 lakh shares were traded in the counter so far compared with average daily volumes of 8.33 lakh shares in the past two weeks.

Meanwhile, the S&P BSE Sensex was up 434 points or 1.10% to 39683.72. The S&P BSE Power index was up 0.11% to 1968, underperforming the benchmark Sensex.

Tata Power will declares its Q2 earnings on 8 November 2019.

Tata Power is India's largest integrated power company and, together with its subsidiaries & jointly controlled entities, has an installed capacity of 10957 MW.

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