Adani Power Falls by Record in Mumbai After Indian State Regulator Ruling

Adani Power Ltd., the generation unit of India’s biggest coal importer, fell by a record in Mumbai trading after Gujarat state’s electricity regulator ruled that the company must honor a supply agreement.

The shares dropped as much as 9.4 percent, the most since Adani Power started trading on Aug. 20, 2009. The stock was at 133.7 rupees at 2:55 p.m. local time, down 3.3 percent, compared with the 0.4 percent gain in the benchmark Sensitive Index.

The Gujarat Electricity Regulatory Commission said in a ruling published on its website that Ahmedabad-based Adani Power cannot terminate a 1,000-megawatt supply agreement signed with state-run Gujarat Urja Vikas Nigam Ltd. in February 2007. Adani Power terminated the accord in January as it couldn’t conclude a deal to secure coal for the proposed power plant in Mundra in the western state, the regulator said.

Adani Power Chief Financial Officer Ameet Desai didn’t immediately respond to an e-mail seeking comment.

The power company controlled by billionaire Gautam Adani plans to spend about 825 billion rupees ($18 billion) to increase capacity almost 17-fold to 16,500 megawatts in the next four years, with a focus on coal-fired generators. The utility currently produces 990 megawatts at Mundra, the site of a planned 4,620-megawatt plant.

To contact the reporters on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.