NEW DELHI: The Supreme Court of India allowed the utility to claim relief for the higher costs. This has resulted from a shortage in domestic supplies at state-run Coal India Ltd.
Both Adani Power and competitor Tata Power – which was also party to the ruling, although it was not mentioned directly in it – struck long-term deals in the middle of the last decade with distribution companies to supply power from plants they each operate in Prime Minister Narendra Modi‘s home state of Gujarat.
Impact on Market Index
The ruling sent Adani Power’s shares down as much as 20 percent on Tuesday, its biggest intra-day loss since it went public in 2009.
The companies also struck deals with domestic and foreign miners in the latter part of the last decade. This was mainly to fuel their plants in Gujarat, which each have over 4,000 megawatt (MW) of capacity.