Tata Power Share Price Rises Up to 4% as Gujarat Clears New Supply Deal for Mundra Plant

Tata Power Company share price rose up to 4% on March 20 after the Gujarat government approved a revised power supply agreement.

Following the news, the stock was trading around 2–3% higher during the session, reflecting positive investor sentiment.

Mundra Plant Set to Resume Operations

The new agreement allows Tata Power to restart long-term electricity supply from its 4 GW Mundra plant in Gujarat.

This imported coal-based plant had remained shut for the past 6 months after the government withdrew an earlier emergency clause. That clause had helped power companies manage higher costs of imported coal.

Relief for Power Supply Concerns

The deal comes at an important time for India, as the country is trying to increase electricity generation. Rising geopolitical tensions in the Middle East have raised concerns about possible gas shortages, especially during the summer season when power demand is high.

Restarting the Mundra plant will help improve power availability and reduce supply risks.

Deal Yet to Get Final Approval

Although the Gujarat government has approved the agreement, it still needs clearance from the power regulator.

The deal is expected to be implemented retrospectively from April 2025. Pricing details have not been fully disclosed, but the state has ensured that tariffs will not exceed rates paid by other states.

Read More: FPIs Withdraw Over ₹52,700 Crore in March as Financial Stocks See Significant Selling!

Tata Power Financial Performance 

In its recent quarterly results, Tata Power Company reported a slight increase in net profit to around ₹1,194 crore.

However, total income declined by about 10% year-on-year, indicating some pressure on revenues despite stable profitability.

Conclusion

The approval of the new power supply deal is a positive development for Tata Power, as it enables the restart of its key Mundra plant. This not only supports the company’s operations but also strengthens India’s power supply at a time of rising demand and global uncertainty.

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