Tata Power Shares Surge 5% Following Signing of Power Purchase Agreement with State Government of Gujarat

Tata Power Share Price Surges 5% Amid Reports of Modified Power Purchase Agreement

Key Highlights

• Tata Power's share price rose by 5% on Friday, March 20, following reports of a modified Power Purchase Agreement (PPA) with the Gujarat government.
• The agreement will enable Tata Power to restart long-term supply from its 4-gigawatt Mundra facility, which has not been operational for the last six months.

Agreement Details

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• The modified PPA provides relief to India by enabling the country to maximize electricity production from its coal facilities, particularly in light of the anticipated gas shortage during the summer.
• The agreement is set to be applied retroactively from April 2025 and awaits approval from the federal power regulator.
• The pricing of the power supply remains unavailable, but the Gujarat government has established that the cost cannot surpass that of other states.

Financial Impact

• Tata Power incurred a loss of ₹1,000 crore in the first nine months of the financial year 2026 due to Mundra's closure.
• The PPA rate conforms to Section 11, indicating that the commercial terms have been finalized.

Market Reaction

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• Tata Power's share price opened at ₹402 apiece on the BSE and touched an intraday high of ₹418.40 per share.
• Analysts expect the stock to extend its gains in the near term, with potential upside targets in the ₹425–₹440 range, while immediate support is placed around ₹380.