Improving demand, merger plan charge up Tata Power's outlook; shares up 8%

Debt reduction, equity infusion, expected tariff hike for Mundra plant bode well

Shares of Tata Power surged around 8 per cent after the company announced June quarter (Q1) results and the merger of its subsidiaries, a step towards simplifying its holding structure.

The company expects the merger of subsidiaries such as Coastal Gujarat Power (CGPL), Tata Power Solar Systems (TPSSL), and Af-Taab Investment Company (AfT­a­ab) with the parent to lead to greater syne­r­gies in financing, compliance, and oversight. Analysts say the much-needed simplification is a positive, and the merger of the 4,000-megawatt Mundra UMPP (CGPL) will also bring in incremental financial and tax efficiencies. While they are watchful of the benefits of