GMR Infra spurts as power tariff rises
This is the second time this week that GMR Infra is right on top of the gainers list. Today, currently, the numero uno gainer, the stock is up 10% at Rs.14.64, closer to its intra day high of Rs.14.77. Last year, on 19th Nov, the stock had hit a new high at Rs.20.46.
Earlier during the week, the reason for optimism was its reduction in losses for Q2 and today it is the much awaited upward power tariff revision from Central Electricity Regulatory Commission (CERC) for GMR Kamalanga Energy, an SPV of GMR Energy.
GMR Kamalanga had submitted an application to CERC for determination of the tariff under the PPA. Pending order of CERC, GMR Kamalanga was being reimbursed @ Rs. 2.75 / unit of total tariff. Consequent to the CERC order GMR Kamlanga will be entitled for a price of FY 14 which shall be approximately Rs 3.97/Unit and Rs 3.4/Unit thereafter.
The company has stated that this long pending order will entitle GMR Group to collect all the arrears of power supply from GMR Kamalanga Energy to GRIDCO for power supplied till September 2015. It is expected to improve the company’s EBITDA by around Rs.120 crore.
Around 85% of Plant’s power generation capacity is tied up through long term Power Purchase Agreement (PPA) which Includes PPA with GRDICO, Orissa for off taking 25% of the power generated from the power station.
GMR Kamalanga Energy limited owns and operates 3x350 MW coal based thermal power plant at Kamalanga village, in Dhenkanal district, Odisha. Its unit 1 was commissioned in April 2013, unit 2 in November 2013 and unit 3 in March 2014. The Union power ministry has granted it the mega power project status.