OPG Power, the developer and operator of power stations in India, was off after reporting that national economic reforms in the country could have an impact on it.
The government of India has announced debt restructuring assistance to State Electricity Boards (SEB), subject to them undertaking reforms on tariff and transmission losses.
OPG said that many SEBs, including Tamil Nadu, had accepted the government's plans, meaning a further rise in regulated tariffs in the Tamil Nadu region was possible sometime during the remainder of the current financial year and more likely in the following year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"However as the timing and quantum of such increases cannot be reliably determined at present, the company has not adopted any further potential increases in tariff in its own estimates," OPG said.
The firm also noted government reforms to improve domestic coal availability over a period of time.
"The company expects limited short term impact of this upon its operations due to its coastal locations and greater fuel flexibility," OPG said.
"However, the removal of 5% import and counter-veiling duties on coal has had a positive effect on landed coal cost."
Shares were down 1% by 09:00 on Tuesday.
MM
-
8 of the best houses for sale with annexesThe best houses with annexes – from a period property in the Lake District to a 13th-century house with a two-bedroom annexe in Saltwood, Kent
-
Zelenskyy moves to appease Donald Trump – what happens now?Ukraine’s president Volodymyr Zelenskyy is conceding ground to secure the least-worst deal possible, says Emily Hohler
