Mumbai: Adani Power rallied on bourses before settling higher by nearly 9 percent Wednesday after the power sector regulator CERC said that the company should be granted "compensation" package for its Mundra project.
Shares of the company surged nearly 15 percent to Rs 50.25 during the day. The scrip finally ended at Rs 47.65, up 8.79 percent on BSE whose barometer closed down 239 points.
At National Stock Exchange, the scrip closed up 8.81 percent at Rs 47.55.
Following the sharp rally in the stock, the market value of the company surged by Rs 921 crore to Rs 11,403 crore.
The company had approached the Central Electricity Regulatory Commission (CERC) last year, seeking revision in tariff from its 1,980-MW Mundra project in Gujarat stating increase in imported fuel cost.
The CERC in its order has said that in order to offset increase in cost of imported coal, till the international price of the commodity is stabilised, the company should be provided with some relief.
"We believe this is positive for APL and Tata Power. Now the decision on coal price pooling is critical for APL which is highly dependent Coal India for its domestic supplies," Edelweiss said in a report.
Tata Power and Reliance Power also closed with gains up to 1 percent.
On Adani Power plea, the CERC order said, "In the present case, the escalation in price of imported coal on account of Indonesian Regulation and non-availability of adequate fuel linkage from Coal India for the project of the petitioner (Adani Power) is a temporary phenomenon and is likely to be stabilised after some time."
"Therefore, the petitioner needs to be compensated for the intervening period with a compensation package over and above the tariff discovered through the competitive bidding," it added.
First Published: Wednesday, April 3, 2013, 12:51