See 25% upside in Tata Power: Rajen Shah

Rajen Shah, CIO of Angel Broking told CNBC-TV18, "Tata Power Company has come down from about Rs 142 levels to about Rs 80 levels. At the current levels we feel there is a decent upside. Good things are happening for the company. First the management has been aggressive to take this bold step of selling out its 30 percent stake in the Indonesian coal mine which will see USD 500 million coming into the balance sheet and with that Rs 3000 crore the company may retire debt which will bring down the interest cost by at least about Rs 300 crore per year.”

“Secondly the CERC ruling has come in favour of Tata Power, so with this the company is going to surely report bumper numbers for FY15,” he added.

“This company is headed for multiple growth over the next five years. I think the capacity currently is about 9000 MW. Probably in the next five years we could see beyond 25,000 MW. I think tomorrow or day after tomorrow the management is meeting for a rights issue or preferential issue. If it is a preferential issue which they did in Indian Hotels long time back and something similar on that lines could infuse Rs 2000 crore in the company and that again would go towards retirement of debt. So, Tata Power at about Rs 80 levels, I see at least 25 percent upside over the next 12 months and that to very safely,” Shah added.