Ways2Capital Reviews : Adani Power’s Kawai And Tiroda Plants Get Compensatory Tariffs; Stock Trades Flat

Maharashtra and Rajasthan electricity regulatory commissions have given their go-ahead for compensatory tariffs for Adani Power’s Kawai and Tiroda power plants, as per a Wire report. This will allow the enterprise to recover the extra costs incurred on fuel obtained from the open market. It was reportedly procuring from the open market to make up for a reduction in supplies by Coal India.

An SC panel convened this week has been asked to settle the issues that have forced Indonesian coal-based power plants of Adani, Tata and Essar in Gujarat to temporarily scale down generation.

Apparently, the Indonesian government changed to international market indices-based pricing in October 2011. This affected the fuel cost calculations of power plants using imported coal. However, under Indonesian law, if coal exporters sell coal below the benchmarked price, they can be jailed.

Following this, the SC had ruled that those power plants using Indonesian law cannot demand additional fuel costs, but reduction in domestic coal supplies by Coal India amounts to change in the 2007 coal distribution policy. This policy promised a 100% fuel supply by Coal India and its subsidiaries. Thus, affected plants could seek compensation.

Adani Power Ltd is currently trading at Rs16.55 down by Rs0.1 or 0.6% from its previous closing of Rs16.65 on the BSE.

The scrip opened at Rs16.75 and has touched a high and low of Rs16.90 and Rs16.40 respectively. So far 38,16,690 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs6,421.80cr.
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About Bhoomi Desai