Tata Power Limited

This is what Tata Power was looking for.

It’s a good decision by Govt

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When it rains, it pours - newsflow+tailwinds , good example of short durations ( in this case last 60 days) if missed will make one miss sizable gains - time in market being key.

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Can you tell us where you got this piece of news? And isn’t supplying energy at 15-16 rs on IEX a better option then to sign PPA at 5.5 rs which I don’t think would be enough since price of imported coal has gone up a lot.

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Tata Motors and Tata Power have joined hands to install EV charging station as Mumbai added 60 more electric buses in the BEST fleet, now totalling at 386 units. Mumbai's BEST adds 60 more electric buses, target 200 double decker buses too

The plant was kept idle as the power purchase price was not economical earlier.
But now it is economically viable for TATA POWER to sell at 5.5.
Also they can sell in open market as per the recent notification by Govt.

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As per this news Tata motors EV will tie up with its group companies who are having good experience for EV infrastructure .

Definitely TATA POWER has the required infrastructure

Advantage Tata power - expect healthy top and bottomline impact with price economics in favor of Tata - Mundra plan updates

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Power shortages may not last beyond a month. Return profile of renewable power projects are low, currently around 9-11%. Consensus estimates haven’t moved much in last 12 months. Can stocks sustain these valuations.

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Will the delicensing & privatization of distribution not add to the power companies’ numbers?

I think once the resistance of the states’ is overcome and the bill is powered on through, it would be indeed best for Indian power sector. Given the current condition of the power distribution this seems inevitable.

I know it’s too early to postulate on benefits, but I think it will be the stop loss for DISCOMS and the consumers & current key private players will be the first & biggest to benefit.

The valuations should then see a further re-rating, Although I think it’s still a long shot for now but I am hopeful.

Disc:- Invested with tracking position but ruminating on increasing my position in next few months

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There’s a bit of political play in the overall scheme of circular debt and payments to powergen firms by states. The central gov move towards auction for day, next day and week are welcome and in that you pay to evacuate what you contracted for. That way powergen producers benefits. But here’s the spanner…a state in election mode can deliberately not buy power, cause disruption and get a random SC order saying “no contracts for a basic right like electricity” hypothetically. Think Vodafone/cairn retro tax order. The lack of clarity, continuity and legal protection makes any weird outcome possible

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Tata Power to boost renewable energy portfolio sixfold by 2030.

Praveer Sinha, Tata Power’s CEO and managing director, is betting big on renewable energy in India.

In PM KUSUM initiative, Sinha said, proposes to convert nearly 4 million of the country’s 9 million diesel-powered pumps to solar power.

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Agree, After The Electricity Amendment Bill, 2021 power distribution will be delicensed and certainly, it will benefits most to the integrated power company and Tata Power is one of them.

Disc - Invested

I have a doubt regarding Tata Power Renewables IPO. Don’t you guys think if the IPO comes, the parent company might become sort of a holding company with few old gen coal and a transmission business, which might result into some kind of discount?

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No one is doubting the growth opportunity for Tata Power both in renewables (but IRRs are single digit); Distribution (again auctioned so will be very competitive) and now some building in gains for EV charging system (which is too early to call). Add to the low return profile is the potential government intervention in this sensitive sector. I doubt multiples can go up too much given this scenario and company would need to raise loads of capital for growth (so dilutive).

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