Tata Power says no provision needed for $650 million Kleros Award

New Delhi: Tata Power Company does not see the need as of now to make any financial provision following an adverse Singapore court ruling in its dispute with Kleros Capital Partners, its management said during an earnings media call.

"To that extent, we feel that at this stage, until the appeal is ultimately finalised, we don't really have to take any provision in our books or take any impact of that order," chief executive Praveer Sinha said.

The matter relates to Tata Power's arbitration case with British Virgin Islands-based Kleros Capital, which was awarded compensation of more than $650 million over a breach of a confidentiality agreement.


The investment firm has since moved to enforce the order by seeking to take control of Tata Power's shares in two of its Singapore subsidiaries.

However, Tata Power said these shares were already pledged with banks, which Kleros would have to approach.

The Indian company has challenged the Singapore International Commercial Court's ruling before the Court of Appeal, with the hearing scheduled for January 19.

"We strongly believe that we have a good case, and our legal team has put together a very strong appeal before the Supreme Court," said Sinha, who is also the company's managing director.

Record profit

Tata Power's consolidated net profit for the quarter ended September rose 33% from a year earlier to an all-time high of ₹1,652 crore. Revenue grew 26% on year to ₹19,886 crore, while earnings before interests, taxes, depreciation and amortisation rose 5% to ₹4,245 crore.

The company incurred a capital expenditure of ₹10,000 crore in the first half of the financial year with investment in renewable energy, transmission infrastructure, pumped storage and distribution networks.

The board approved an investment of ₹11,871 crore for a 1,800 MW pumped storage project at Shirwata in Maharashtra, as it looks to build on round-the-clock renewable energy projects.

The company has been importing coal and has adequate stock for both its Mundra and Trombay plants, Sinha said.

While the coal price has gone up a little, it is not very high compared to what was in the Covid period, he said.

The company's Mundra plant that uses imported coal is currently running on special provisions of Section 11 of the Electricity Act, wherein the government can direct a plant to run at optimum capacity and recover the costs. The directive comes to an end in December.

On seeking extension to the directive, Sinha said the company expects that by end December it would be able to conclude the supplemental power purchase agreements with two other distribution companies of the five it has the pact with.

The move will enable the company to run on the pacts rather than requiring the directive.

Banga named CEO-designate

Tata Power's board approved the appointment of Sanjay Banga as CEO-designate. Banga will subsequently assume the role of CEO, managing director and key managerial personnel for a five-year term running from May 1, 2027, to April 30, 2032, subject to shareholder approval. Banga was CEO and MD at Tata Power Renewable Energy Ltd.