KSK Surges to Eight-Month High in Mumbai on Regulator’s Ruling
KSK Energy Ventures Ltd. (KSK) jumped to its highest level in eight months after a regulator refrained from canceling the Indian power generator’s sales contract with Reliance Infrastructure Ltd. (RELI)
KSK’s shares jumped as much as 18 percent to 123 rupees, the most since Aug. 9, and traded at 107.6 rupees as of 3:13 p.m. local time, the third-best performer on the BSE 200 Index.
KSK’s unit signed a contract with Reliance Infrastructure in June to supply 260 megawatts from April 2011 through March 2014 at an average 4.85 rupees per kilowatts-hour, according to an interim order dated April 15 by the Maharashtra Electricity Regulatory Commission. Reliance cited the cost of power among reasons to end the accord, the regulator said. Reliance should have considered the tarriff at the time of accepting bids from suppliers, the order said.
“The proposed tariff leads to an upside of about 5 rupees a share over our earlier estimate of 150 rupees,” Devam Modi, an analyst with Equirus Securities Pvt., said in an e-mailed reponse. “There has been a positive impact on the share price and we expect the share to trade within a higher range as a result of this order.”
Vivek Devasthali, a spokesman at Reliance Infrastructure, declined to comment on the regulator’s order. An e-mail to K.V. Krishna Murthy, vice president at KSK Energy, wasn’t answered.
To contact the reporter on this story: Ameya Karve in Mumbai email@example.com.
To contact the editor responsible for this story: Darren Boey at firstname.lastname@example.org.