Tata Power Company rose 0.36% to Rs 55.60 after the company said it emerged as the successful bidder to own the licence for distribution and retail supply of electricity in Odisha's five circles.
The Odisha Electricity Regulatory Commission (OERC) on 20 December 2019 awarded the Letter of Intent (LOI) to The Tata Power Company informing the company's selection as the successful bidder to own the licence for the distribution and retail supply of electricity in Odisha's five circles, together constituting Central Electricity Supply Utility of Odisha (CESU).The five electrical cirlces constituting CESU are the areas of Bhubaneswar (Electrical Circle -I and II), Cuttack, Paradip and Dhenkanal. The license is being offered for 25 years initially.
CESU is spread over 30000 square kilometers with population of over 1.4 crore and consumer base of 2.5 million. The average demand of CESU is around 1,300 megawatts (MW) with the annual input energy of 8,400MUs (FY 2018).
Presently, Tata Power has total consumer base of 2.5 million across Mumbai, Delhi and Ajmer and with acquisition of CESU, its consumer base would double and touch 5 million consumers.
The proposed sale of CESU to Tata Power will be through the formation of a special purpose vehicle entity. Tata Power has been informed that Government of Odisha will own 49% equity stake in the proposed SPV and Tata Power will hold 51% equity with their management. The disclosure was made during market hours today, 23 December 2019.
The Nifty 50 index fell 31.10 points or 0.25% at 12,240.70.
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On the technical front, the stock's RSI (relative strength index) stood at 50.893. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.
The stock was trading below its 50-day moving average (DMA) placed at Rs 56.90 and 200-day moving average (DMA) placed at Rs 63.31. Both these levels would serve as resistance levels in the near term.
Tata Power Company's consolidated net profit slipped 19.5% to Rs 270.17 crore on 4.4% rise in net sales to Rs 7,677.82 crore in Q2 September 2019 over Q2 September 2018.
Tata Power Company's principal businesses are in the areas of generation, transmission, distribution-cum-retail, power trading, power services, coal mines and logistics, strategic engineering for defense applications, solar photovoltaic (PV) manufacturing, and engineering, procurement and construction (EPC) services.
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