Tata Power gains 2% on MoU with Tamil Nadu govt for Rs 3,000-cr solar plant

Shares of Tata Power Company gained 2 per cent to Rs 216 on the BSE in Tuesday's intra-day trade after the company signed Memorandum of Understanding (MoU) with Tamil Nadu government for Rs 3,000-crore investment to set up mega solar manufacturing plant. The stock was trading higher for the third straight day, having surged 7 per cent during the period.

The MoU is for setting up a greenfield 4GW solar cell and 4GW solar module manufacturing plant in Tirunelveli district of Tamil Nadu. The investment in the plant will be made over a period of 16 months.

"Tata Power Solar's new production facility is being set up with the support and assistance of Tamil Nadu Government, and will help to meet the rising demand for clean energy solutions in the country apart from providing huge employment opportunities," the company said.

The Tata Group Company is one of India's largest integrated power companies and together with its subsidiaries and jointly controlled entities, has an installed/managed capacity of 13,735 MW. The Company has a presence across the entire power value chain - generation of renewable as well as conventional power including hydro and thermal energy, transmission & distribution, coal & freight, logistics, and trading.

In the past three months, Tata Power has underperformed the market by falling 21 per cent as compared to 11 per cent decline in the S&P BSE Sensex.

"Tata Power plans to enhance its cell and module manufacturing capacity by 4GW each by FY24 end for a Capex of Rs 3,400 crore. Its EPC order book, as on date, stands at Rs 1,280 crore and is gaining strong traction across solar pump, rooftop, and EV segment with strong order bookings. The deal with Blackrock will provide the required equity Capex for renewable expansions; however, its valuation stands below our expectation," analysts at HDFC Securities had said in their Q4 result update report dated May 9, 2022.