Credit Suisse downgrades Tata Power; shares down

Tata Power Company, one of the largest private power producers in India, declined more than 1 percent after the foreign research house Credit Suisse downgraded the stock to underperform.

"While Tata Power is petitioning with Central Electricity Regulatory Commission (CERC) for an upward revision in Mundra ultra mega power project's tariff, an early resolution seems unlikely," Credit Suisse reasoned.

The research firm cut the target price to Rs 83 for the stock.

Against the backdrop of increase in prices of imported coal, Tata Power approached CERC seeking higher tariffs for the electricity generated from the Mundra plant.

In last week, Tata Power said its 4,000 MW Mundra ultra mega power project (UMPP) was fully operational with the synchronisation of the fifth 800 MW unit.

With the synchronisation of the fifth unit at Mundra plant, country's first UMPP, the utility's overall generation capacity has increased to nearly 8,500 MW, according to an official statement.

Tata Power, in a statement said that now its thermal power generation capacity stands at 7,647 MW while generation through clean sources such as hydro, wind and solar stands at 852 MW. Synchronisation is the final step before commissioning of a power generation unit.

The plant is being implemented by Coastal Gujarat Project Ltd (CGPL), a special purpose vehicle of Tata Power. The company has inked power purchase agreements for the project with seven procurers from five states - Gujarat, Haryana, Maharashtra, Rajasthan and Punjab.
 
At 09:55 hours IST, shares went down 0.54 percent to Rs 100.50 on Bombay Stock Exchange.

In the previous trading session, the stock rose 2.28 percent to close at Rs 101.05.
 
(With inputs from PTI)