Reliance Infra, Tata Power rally on Delhi payment hopes

Reuters Market Eye - Shares in Reliance Infrastructure Ltd gain 5 percent, while Tata Power surges 4.1 percent, after Delhi's electricity regulator laid out a plan to pay the utilities for some of the money owed to them by consumers in the Indian capital.

The Delhi Electricity Regulatory Commission will allow units of both companies to recover 80 billion rupees over the next eight years, DERC's Chairman PD Sudhakar told Reuters.

Domestic electricity utilities have long suffered financially as Indians view cheap or free power as a right, not a privilege, leading politicians to keep tariffs low.

Sudhakar said he expects an 8 percent surcharge that DERC had imposed on tariffs two years ago would pay for the reimbursement, but any shortfall could see tariffs rise further in the future.

 

(Reporting by Thomas Wilkes)