Mundra shutdown costs Tata Power Rs 800 crore

Mumbai: Tata Power's 4,000 MW coal-fired Mundra power plant has incurred a loss of about ₹800 crore in the first nine months of the current financial year, primarily due to an extended shutdown, the company announced on Wednesday.

The plant was shut for nearly six months, during which time it did not receive any capacity charges, while fixed costs continued. As a result, a loss of about ₹800 crore was booked during the period, Tata Power's chief executive officer and managing director, Praveer Sinha, told analysts after the company announced its December-quarter results.

Tata Power reported a muted year-on-year (y-o-y) growth in its consolidated profit for the December quarter, largely because of the suspension of operations at the Mundra plant since July 3.


The company's consolidated profit stood nearly flat at ₹1,194.33 crore, compared with ₹1,187.54 crore a year ago, it said in a regulatory filing on Wednesday.

Profit attributable to the owners of the company, however, was down by 25% to ₹772 crore, against ₹1,031 crore reported in the corresponding quarter of the previous year.

Restarting operations at the unit is critical for Tata Power as it accounts for nearly one-fourth of the company's total electricity generation capacity of around 16 gigawatts.

The plant consists of five supercritical units of 800 MW each.

Sinha said the company expects the Mundra plant to resume operations shortly, which would lead to a significantly stronger performance compared with the December quarter, as well as the corresponding period last year.

The company said talks for power purchase are on with the Gujarat government and are expected to be finalised soon.

Tata Power is also in talks with four other power-procuring states-Rajasthan, Maharashtra, Punjab and Haryana-which may adopt the same framework once Gujarat finalises the agreement.

Mundra is one of the lowest cost power producers in the country and would be well positioned to meet peak electricity demand.