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Tata Power Company is trading lower by 5% to Rs 82.70, extending its previous day’s 2% fall, after ratings agency Moody's Investors Service revised the ratings outlook of the company to negative from stable.
"The negative outlook reflects renewed uncertainties related to the material covenant breaches on bank debt associated with Tata Power Company’s Gujarat-based Mundra Ultra Mega Power Project which is being executed under its fully owned subsidiary, Coastal Gujarat Power Limited," says Ray Tay, a Moody's Associate Vice President and Analyst in a note.
Moody's adds that the waivers from banks against the covenant breaches secured by the Tata Power unit in charge of the project expired on June 30.
The Mundra Ultra Mega Power Project, an imported coal 4GW power project, is a significant investment for Tata Power as it increases its generation capacity by almost 50 percent, Moody's adds.
The stock opened at Rs 86.05 and hit a low of Rs 82.25 on NSE. A combined 1.5 million shares have changed hands on the counter so far on NSE and BSE.
