Adani Power shares rally on tariff hike ruling

MUMBAI Wed Apr 3, 2013 4:00pm IST

1 of 2. A general view of Adani Power Company thermal power plant is pictured at Mundra in Gujarat September 24, 2012.

Credit: Reuters/Amit Dave/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - Shares in Adani Power(ADAN.NS) gained as much as 15 percent on Wednesday after regulators allowed the power utility to raise tariffs for electricity on a temporary basis, in a ruling that could boost other firms grappling with erratic fuel supplies.

The Central Electricity Regulatory Commission (CERC) has allowed Adani Power to charge "compensatory" tariffs for electricity from its Mundra plant in Gujarat, until supply conditions improve.

The regulator said Adani should be allowed such a tariff, citing the "unforeseen" events of the rising cost of imported coal from Indonesia, coupled with the shortages of domestic supplies from the state-run Coal India Ltd.

"As and when the hardship is removed or lessened, the compensatory tariff should be revised or withdrawn," the regulator said in an order, adding that a committee should be set up to establish the amount of the tariff.

It did not say how long the provision for higher tariffs would run, but added that the supply problem was a "temporary phenomenon and is likely to be stabilized after some time".

An external spokeswoman for Adani Power declined to comment.

The order boosted shares of other power companies, raising hopes for a similar reprieve for them.

India's power sector has struggled with domestic coal shortages and has become increasingly reliant on costlier imports to meet the country's rapidly growing energy needs.

Adani Power shares ended up 9 percent.

A decision on similar cases filed by Tata and Reliance Power could be taken within 10 days or so, S. Jayaraman, a CERC official, told the Indian news channel CNBC-TV 18.

(Reporting by Matthias Williams; Additional reporting by Abhishek Vishnoi; Editing by Clarence Fernandez)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Press Event

Press Event

Modi takes tea, but no questions, in first press event as PM.  Full Article 

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage