4f0de2c4-e39d-48f9-abfb-c811b1d66d47.pdf (232.0 KB) Kleros won 500M USD in arbitration from Tata Power, which is almost 1.2 times the Net profit FY25
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Really intriguing. This arbitration award against the company is more than Rs 5500 cr. inclusive of interest. Taking into consideration the reputation and past history of judgement of Singapore Arbitration Court, this is a huge setback for the company.
We have seen how market reacts to any sets of negative news. But in this case, there is almost no reaction. The stock has dipped slightly in line with lackluster market sentiments for last few sessions. Also there was no mention in leading channels. I am unable to understand how to interpret it.
Only few days back Moody’s has affirmed Ba1 rating while upgrading Outlook to positive. Such reputed rating agency has taken this pending case into consideration or mentioned it in their report? Don’t know.
Also there is no management clarification, except cryptic report to exchanges.
Was considering to buy Tatapower, but now not so sure.
Keeping my fingers crossed.
Previously there was another case for $150m, Tata Power countersued them for $250m. These things get settled out of court, rulings are squashed and stretched for years. There is a close watch on this, but till there’s uncertainty, benefit of doubt goes to Tata Power.
Similarly perplexed, I was sitting on almost 100% profit and sold out. But after seeing the market reaction, I’m not sure what I’m missing. I’m keeping a close watch and hopefully will get some clarification from the company and its performance in the coming quarters. I’m still very confident in the company’s future prospects.
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Q3 was ok-ish, but the long-term story is intact.
The company aims to achieve 100% clean power generation by 2045, and nuclear energy is intended to provide the baseload power that weather-dependent renewables (solar and wind) cannot.
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Tata Power first the Mundra Plant was not operational now loss of arbitration … company is laden with issues. how are long term holders viewing the situation
Next 28 days will give us a final view on this but market is already pricing negative. Now this $490 million i.e. close to 4.8-5k crores. Now the m-cap today contracted by 4-4.5 k crores. So you can do a rough math by yourself because how much discount to apply to current m-cap is quite subjective. I will look to apply minimum 10% discount to this.
Mundra plant issue will be solved as the government both central and state can’t afford idle power plants especially those are already on grid as it blocks out capacity and importantly this is thermal plant which provides baseload power during night times when renewable i.e. solar and partially wind is not available.
So Mundra should not remain a issue going forward according to my assessment of current situation.