JSW Energy rises 3% on subsidiary getting nod to claim recovery of ₹120 crore from Tamil Nadu discom
Upstox
2 min read • Updated: April 18, 2024, 2:43 PM
Summary
Shares of JSW Energy Ltd, one of India’s leading power generation and transmission companies, gained over 3% in trade on Thursday, April 18, after its subsidiary was allowed to claim recovery from a Tamil Nadu power distribution company.
JSW Energy’s subsidiary, Ind-Barath Energy (Utkal) Ltd (IBEUL), had initiated arbitration against Tamil Nadu Generation and Distribution Corp Ltd (TANGEDCO) regarding disputes arising out of the power purchase agreement dated August 8, 2013, entered into between both the parties.
The arbitral tribunal has now issued an award allowing IBEUL’s claim for recovery of ₹120 crore from TANGEDCO along with 9% interest from the date of wrongful encashment of performance bank guarantee by TANGEDCO till payment of the entire amount.
The tribunal has also rejected TANGEDCO’s counterclaim for recovery of ₹118 crore as penalty and ₹200 crore towards termination charges.
SW Energy had informed in September 2023 that, in an arbitration initiated against TANGEDCO, IBEUL was seeking the return of contract performance bank guarantee (PBG) of ₹120 crore, refund of ₹11.02 crore deducted by TANGEDCO from monthly bills, and damages for TANGEDCO’s failure to provide standby letter of credit, unilateral deduction of tariff and wrongful termination of power purchase agreement.
Following the announcement of the arbitration award, shares of JSW Energy jumped as much as 4% to hit an intraday high of ₹628 apiece on the NSE. Notably, the JSW stock has rallied nearly 150% in the past year and has recently hit its 52-week high of ₹632.1 apiece on April 8, 2024.
The company was in the news earlier this week when its unit, JSW Renewable Energy Ltd, completed the acquisition of a 45-megawatt (MW) wind power project in Vashpet, Maharashtra, from Reliance Power for ₹132.39 crore.