Tata Power shares fall 2% on $490-million arbitration ruling against Co

Over the past one year, Tata Power shares have experienced a decline of 7.9 per cent on the NSE

Tata Power shares witnessed a drop of over 2.4 per cent to hit an intraday low of ₹396.60 per share on Thursday. The drop in the Tata Group company's share price came after it was directed by an arbitration tribunal to pay over $490 million in damages to Kleros Capital Partners.

 

At 11:00 am, Tata Power shares were trading at ₹400.7 per share, down by 1.4 per cent on the National Stock Exchange. In comparison, the Nifty50 was trading in green, up by 95 points or 0.37 per cent at 25,549. So far this year, the shares of Tata group's power arm have remained largely range-bound, witnessing a mere single digit rise of over 3 per cent.  On an annual basis, Tata Power Shares have struggled to trade in green, experiencing a decline of 7.9 per cent on the NSE.  Currently, Tata Power shares are down by more than 19 per cent from the 52-week high level of ₹494.85, touched last September.  Why are Tata Power shares falling today?

 

The decline in Tata Power shares came after the arbitration tribunal ordered the company, with a majority of 2:1, to pay damages worth $490 million with simple interest of 5.33 per cent, from November 30, 2020, till the amount is paid. Tata Power, however,  mentioned that it is still in the process of reviewing the order.

 

"The three member arbitral tribunal, with a majority of 2:1, has partially allowed the claim that Kleros had filed in these arbitration proceedings, and has awarded Kleros, damages in the sum of (a) $490,320,000 with simple interest of 5.33 per cent from November, 30 2020 till the same is paid and (b) cost of $8,289,020.46 with simple interest of 5.33 per cent from July 1, 2025 till the same is paid," the company's exchange filing read. The case is related to Tata Power's Russian mining partner, Kleros Capital Partners. The mining firm got into a dispute with the Tata group company over a non-disclosure agreement tied to a proposed project in Russia. Kleros reportedly claimed that Tata Power broke confidentiality and non-circumvention terms. 

About Tata Power

 

Tata Power is the country's largest domestic integrated power firm and has presence across the entire power value chain of conventional, renewable energy and power services. For the quarter ending March, Tata Power's revenue figure stood at ₹17,238 crore, marking a rise of 7 per cent from ₹16,256 crore recorded in the corresponding quarter of the previous fiscal. Profit after tax (PAT) stood at ₹1,306 crore, marking a solid double-digit rise of 25 per cent from ₹1,046 recorded in the same period of the previous fiscal.