Tata Power trips and goes 'off'
Tata Power is in the red today, currently down over 3% at Rs.87.50, which is around its intra day low levels of Rs.86.
The stock is down after the Supreme Court yesterday stated that companies cannot seek higher tariff due to adverse impact of the unforeseen and unprecedented escalation in the imported fuel prices after bagging contracts for supply of electricity to state discoms on the basis of tariff-based competitive bidding process.
This is good news for the customers as it means they will not be charged a higher tariff from March 2014, which was ordered by the tribunal on 21st July. And for Tata Power and Adani, it means that they currently have no way to recover the cost escalations which they suffer on account of imported coal.