Broker’s call: Tata Power (Buy)
JM Financial
Tata Power faces a potential loss of USD 490 million following a Singapore court's rejection of its challenge to arbitral awards. The dispute stems from a 2013 non-disclosure agreement (NDA) signed with Kleros Capital to explore coal mining in Russia for Tata Power's Mundra plant. The partnership ended in 2018, and Tata Power independently obtained the mining license.
Kleros alleges that Tata Power breached the NDA, leading to arbitration proceedings in November 2020. The tribunal found Tata Power liable and ordered a USD 490 million payout, which the company is appealing to higher courts. Tata Power estimates a provision of ₹6,000 crore ($650 million), which is 4-5% of its target valuation. Despite the setback, the company maintains a Buy rating with a target price of ₹422, taking into account FY26 actuals.
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