NEW DELHI: Shares of Adani Power slumped 9 per cent today after the Supreme Court said that power distribution firms cannot charge "compensatory tariff" from consumers and set aside the appellate tribunal's judgement in this regard.
Extending last session's sharp losses, shares of Adani Power tumbled 9.01 per cent to close at Rs 33.85 on BSE. During the day, it dived 11.55 per cent to Rs 32.90. Shares of Tata Power fell 1.75 per cent during the day before ending marginally higher by 0.06 per cent at Rs 85.45. The two stocks had lost up to 16 per cent in the previous session also.
Selling was also seen in other Adani group stocks, with Adani Transmission plunging 9.77 per cent, Adani Enterprises (5.42 per cent) and Adani Ports and Special Economic Zone (2.06 per cent).
Tata Power's wholly-owned subsidiary Coastal Gujarat Power Ltd and Adani Power had originally moved the Central Electricity Regulatory Commission (CERC) seeking higher tariff on the grounds that their input costs had gone up due to rupee devaluation and higher costs of coal imported from Indonesia, owing to a regulation passed by the Southeast Asian nation.
The apex court did not agree with the contentions of these firms which referred to the findings of the Appellate Tribunal for Electricity that rise in coal price consequent to change in the Indonesian law was a factor that entitled them to claim compensatory tariff.
While setting aside the appellate tribunal's judgement as well as the CERC's order, a bench of Justices P C Ghose and R F Nariman said that an unexpected rise in coal price would not absolve the firms from adhering to the contract as they had knowingly taken the risk while submitting their bids.