Tata Power shares trade lower despite receiving LoA for solar project

The shares of Tata Power were trading lower despite an announcement of LoA receipt from the company on Wednesday. The company, during the market hours on Wednesday, informed via stock exchange filing that it has received a letter of award (LoA) from Gujarat Urja Vikas Nigam Limited (GUVNL) to develop a 100 MW solar project in Dholera solar park.

The press release from the company stated that energy will be supplied to GUVNL under a power purchase agreement (PPA). The contract would be valid for a period of 25 years from the scheduled commercial operation date, as per the statement by the company.

The stated project is supposed to be commissioned within 15 months from the date of execution. As per the recent data from the company, the cumulative capacity under development in Gujarat would now stand at 620 MW after the completion of this project. Overall, the plant is expected to generate about 246 million units of energy per year.

The share price fell as much as 2.5 per cent on BSE to quote price at Rs 52.65 per share.