Share prices of Adani Power and Tata Power fell 16.12% and 1.95% respectively, on Tuesday after the Supreme Court disallowed compensatory tariff to both the companies. The power companies, which source raw coal from Indonesia to operate two power plants in Gujarat, wanted to increase tariff as they said a change in Indonesian laws on coal export prices had raised costs.
Adani Power’s shares fell 17.6% intra-day and closed the session at Rs 37.20. This is the biggest intra-day fall since August 2015. Adani Power was the biggest loser in the S&P BSE Power index.
The stock of Adani Ports, an Adani Group company, also fell 4.78% and closed Tuesday’s session at Rs 334.45. Adani Ports was the biggest loser among the Sensex stocks. The share price of Adani Transmission, another group company, fell 9.92%.
A total of 14 crore Adani Power’s shares were traded on BSE and NSE, 12 times more than its 6 month average of 1.19 crore shares. Of the 13 analysts who track the stock, nine have given it a sell rating.
Tata Power, on the other hand, fell 6.7% intra-day and ended the session at Rs 85.40, a fall of 1.95% from its previous close. A total of 3.51 crore shares were traded on BSE and NSE. This is seven times more than its 6-month average of 47.96 lakh.
The apex court had set aside an earlier ruling of Appellate Tribunal for Electricity (Aptel), which allowed the companies to charge compensatory tariff from customers.
The appellate tribunal had held that an unforeseen increase in the cost of coal would be a “force majeure event” under the power purchase agreements (PPAs) between the power generating companies and distributors.