Tata Power stock hit by concerns over tariff hike at Mundra plant

While issues regarding tariff of Mundra plant and elevated debt are on the path of resolution, winning of electricity distribution licences in Odisha offers comfort

The stock of Tata Power has underperformed the BSE Power Index for a long time now. While it has lost 2.3 per cent in the past three months, the index has gained 2.7 per cent during the same period.

Concerns over tariff hikes for its 4,000-megawatt Mundra power plant in Gujarat and balance sheet deleveraging are among the major issues hurting investor sentiment.

In the case of Mundra plant, the Central Electricity Regulatory Commission has allowed tariff hike after the company negotiated with the five states it supplies power to from this plant. However, three states (Rajasthan, Maharashtra, and Haryana)