The Supreme Court gave a nod to Adani Power Mundra's decision of terminating the power purchase agreement (PPA) it had signed with Gujarat Urja Vikas Nigam (GUVNL) as it could not get coal supply on time from the Naini block of Gujarat Mineral Development Corporation (GMDC).
The block was allocated to GMDC by the ministry of coal but was de-allocated in 2014. GMDC was supposed to construct a power plant near the coal mine, however, it decided to transport coal to Gujarat for two power units belonging to Adani Power and Torrent Power.
Adani Power had signed the PPA in 2007 with GUVNL for the supply of 1,000MW at Rs2.35/unit from its power project at Korba, Chhattisgarh, based on coal supply from Naini, and GMDC had agreed to supply 4mn tonnes of coal per year to Adani.
The Supreme Court said: “In order to do economic justice, on the principle of business efficacy, the appellant would be entitled for adjustment of cost of the project and would also be entitled to the interest on the expenditure incurred by it for completion of the project. The expenditure towards running of the project after obtaining the coal from the open market would also be required to be taken into consideration.”
Further, the SC has allowed Adani to seek a compensatory rate for the electricity it had alternatively supplied to Gujarat from its Korba power project in Chhattisgarh. The rate will be decided by the Central Electricity Regulatory Commission (CERC) within three months from the date it is approached by the company.
GUVNL will then need to make the payment to Adani within three months of the date of CERC's decision.
Adani Power Ltd is currently trading at Rs64.50 down by Rs0.3 or 0.46% from its previous closing of Rs64.80 on the BSE.
The scrip opened at Rs64.30 and has touched a high and low of Rs66 and Rs63.70 respectively. So far 1,57,68,354 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs24,992.96cr.
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