Tata Power shares in focus on receiving LoI by REC arm for Rs 838 crore project SPV

Tata Power Company Ltd shares will be in focus on Monday morning after the Tata group firm said it has received Letter of Intent (LOI) from REC Power Development and Consultancy Limited, a subsidiary of REC Ltd, to acquire Jalpura Khurja Power Transmission Limited, a project special purpose vehicle (SPV).

The project SPV (Jalpura Khurja Power Transmission Limited) would be developed on build-own-operate transfer basis, to provide transmission service for 35 years from the schedule date of commercial operation (SCOD), which is 18 months from the date of SPV acquisition.

The estimated cost of the project, Tata Power said, is Rs 838 crore.

"We would like to inform that the company has received Letter of Intent (LOI) from REC Power Development and Consultancy Limited (a wholly-owned subsidiary of REC Limited) to acquire Jalpura Khurja Power Transmission Limited, a project special purpose vehicle (SPV)," Tata Power said.

Meanwhile, Nuvama last week hosted the top management of Tata Power at 2024 edition of Nuvama Conference—India 2025: Now, More Than Ever. Among key highlights, Nuvama said was the fact that Tata Power was looking to grow its profit by over two times to Rs ,7000 crore by FY27 from Rs 2,600 crore in FY22, on account of renewable energy (RE), solar manufacturing/EPC, regulated capex and pumped hydro assets. Tata Power, Nuvama suggested, was targeting an operational RE capacity of 10GW by the March quarter. TPREL won a recent FDRE project from SJVN of 1,316MW, the brokerage noted.

"While the RE business is yet to reach 3-4GW additions/year required to meet FY27 PAT targets, falling coal profits remain a drag. Despite our bull case, we find no upside. Hence, we maintain ‘REDUCE’ on the stock with a target price of Rs 303.

Also read: Stock recommendations by analyst for February 19: Adani Ports, SBI Life and Tata Consumer

Also read: Life Insurance Corporation of India: LIC shares in focus after Rs 21,741 crore tax refund