Power Grid was under pressure on bourses last week as the street factored in lower return on equity (RoE) after the Central Electricity Regulatory Commission (CERC) proposed to reduce regulated RoE for renewables.
Lower dependence on imported coal and tariff relief for affected projects is positive for the power sector but timeline for implementation of tariff relief is still unclear, domestic ratings agency Icra said.
Power regulator CERC has allowed Tata Power and Adani Power to pass through the losses suffered by them due to procuring high price coal from Indonesia to run their power plant.
Even if the Supreme Court votes in favour of Tata Power and Adani Power, it is unlikely to move stock prices of these companies much as analysts have more or lesss priced in this news, feels Murtaza Arsiwalla of Kotak Institutional Equities.
Central Electricity Regulatory Authority (CERC) had brought new tariff regulation for determination of tariff for a period of five years from April 1, 2014.
SP Tulsian of sptulsian.com has a positive view on cement space including Sagar Cements on the back on operating leverage of the company.
Contrary to the market's perception of an APTEL order that is said to have struck down compensatory tariff for Tata Power and Adani Power, Anil Sardana, MD of the former says the market has got it wrong and termed the order a "vindication" for the company.
The company's consolidated net loss after tax, minority interest and shares of loss of associates in the corresponding quarter in the previous fiscal was Rs 638.33 crore, it said in a BSE filing.
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CNBC-TV18‘s Anshu Sharma reports that CERC has provided a mechanism to enable future pass-through on monthly basis, which provides annual compensation of over Rs 300 crore for 25 years PPA term.
The company said this long pending order would entitle GMR Group to collect all arrears of power supply from GMR Kamalanga Energy to GRIDCO for power supplied till September 2015. Going forward, the order will help improve company‘s EBITDA by Rs 120 crore, it added.
Ashok Khurana, Director-General, Association of Power Producers says the power sector needs an immediate solution amidst the collapsing demand since past three years.
Revenue grew by 12.4 percent to Rs 2,531 crore in same period. Operating profit rose 17 percent year-on-year to Rs 998 crore during the quarter, driven by lower fuel cost and generation from hydro assets. Margin expanded by 160 basis points to 39.4 percent on yearly basis.
For the remaining stake in electricity exchange IEX, the company had earlier this week entered into a share purchase agreement with MADISON India Opportunities III for sale of 1.58 percent stake.
Bank of India has 1 percent exposure to state electricity boards (SEBs) and all of them are standard assets
The company's net profit in the year-ago period was Rs 334.06 crore, NLC said in a regulatory filing. The total income from operations of the company increased to Rs 1,843.74 crore compared with Rs 1,510.45 crore in the corresponding quarter of the previous fiscal, it said.
Adani had sought to raise arguments of "force majeure" and "change in law" with respect to change in Indonesian coal laws, saying it had affected its cost of coal
The 5-member panel includes Pratyush Sinha (ex-Central Vigilance Commissioner), Pramod Deo (ex-CERC Chairman) and R N Choubey, Special Secretary, Ministry of Power.
The Commission has approved the five-year (FY11-FY14) tariff petition of Maithon Power, a joint venture between Tata Power (74 percent) and Damodar Valley Corporation (26 percent).
An order on draft paper given to the Central Electricity Regulatory Commission (CERC) on lowering the floor price for these renewable energy certificates (RECs) is expected by November-end.
Arup Roy Choudhury, CMD of NTPC declined to commend on the CERC norms since the matter is sub judice.
Harshvardhan Dole of IIFL says recent decisions such as to liquidate regulatory assets on Tata's Delhi discom, the power tariff hike for the Mundra plant will help alleviate the company's financial stress.
According to Jain, CERC's authority had already been upheld by APTEL and the Supreme Court.
"The board has approved raising funds upto Rs 2,000 crore by way of a rights issue of equity shares of face value of Rs 1 each subject to all applicable statutory and regulatory approvals," it said in a statement to the BSE.
"The tariff increase will reduce CGPL's financial losses and benefit Tata Power Company's (TPC) credit quality. CGPL is a material part of TPC group and its debt accounted for approximately 30 per cent of total consolidated debt as of 31 March 2013," Moody's Investors Service said.