Tata Power Shares Jump 5% as Gujarat Clears Mundra Deal

Gujarat has approved a revised power supply pact with Tata Power, permitting the company to resume long-term supply from its 4-gigawatt Mundra plant, reported Reuters.

The imported coal-fired plant has not operated for the past six months after the government withdrew the emergency clause in 2025 that compensates companies for generating power using expensive imported coal.

Tata Power Mundra Plant Resumption

As reported by NDTV Profit, Tata Power will likely resume its Mundra plant next week after securing a new Supplemental Power Purchase Agreement (SPPA), which would allow the plant to resume operations and supply electricity before upcoming peak summer demand.

The deal comes as a relief to India, which is looking to maximise power output from its coal plants amid an escalating Middle East conflict that is expected to lead to a gas shortage during summer.

The deal needs approval from the federal power regulator and would take effect retrospectively from April 2025.

The document did not have details on the exact pricing of the power supply but Gujarat has mandated that the price must not exceed that paid by other states, as per the document.

Tata Power’s shares were up 3.3% in early trade at 411 rupees at 0400 GMT in Mumbai.

Tata Power Share Price Jumps

Tata Power share price surged 5% on March 20 after Gujarat approved a new power supply agreement, permitting the company to restart its 4-gigawatt(GW) Mundra facility. The agreement aims to boost electricity production amid potential gas shortages, pending approval from the federal regulator, effective retroactively from April 2025.

The intraday low for Tata Power shares on March 20 on the BSE was ₹402, and the stock reached an intraday high of ₹418.40.

Maximising Output Prioritised

Meanwhile, India is considering the use of an emergency clause that would force coal power plants that run on imported coal to maximise output ahead of the summer season, as the US-Israeli war on Iran has hit gas supplies, reported Reuters.

The country expects peak power demand to touch 270 gigawatts (GW) during the summer, India’s federal power minister Manohar Lal Khattar said at an industry event on March 19.

Power using imported coal costs more than power from cheaper domestic coal. Under the emergency provision, a government‑appointed panel will decide the rate at which power will be purchased from the plants based on ​the cost of the imported coal.