Tata Power Company Limited has informed the Exchange about update on pendency of litigation
TATAPOWER · price
▲ positive · ▼ negative · ● neutral filings · teal = economic event · numbered = multiple that day (click to pick). Times IST.
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Tata Power has updated the stock exchanges on a Supreme Court judgment related to its joint venture Tata Power Delhi Distribution Limited (TPDDL). The Court ruled that State Electricity Regulatory Commissions cannot routinely create 'Regulatory Assets' (unrecovered costs owed to discoms) under normal business conditions — only during force majeure or exceptional circumstances under the Electricity Act, 2003. As a result, TPDDL's outstanding regulatory assets must be liquidated within a maximum of 4 years starting April 1, 2024, with the Delhi regulator required to lay out a roadmap by March 2028. The company has stated it expects time-bound monitoring of regulatory asset amortisation through APTEL (the appellate tribunal) and is taking steps in line with the judgment.
The ruling restricts easy accumulation of regulatory assets going forward, which tightens the cash flow profile of discoms like TPDDL. However, the time-bound liquidation framework also gives TPDDL certainty on recovery of its existing dues by March 2028, which is broadly a neutral-to-slightly-positive development for Tata Power shareholders.