R-Infra has been granted license to distribute electricity by MERC for 25 years from August 16, 2011 onwards. R-Infra currently caters to needs of ~2.8 mn consumers in Mumbai & Mumbai suburbs spread over 400 sq. kms with energy input requirement of over 9 bn units per annum. Tata Power over the last 4 years has been using R-Infra network to cater to energy requirements of users from Mumbai & Mumbai suburbs. Despite using R-Infra network and higher power costs, Tata Power (T-Power) was able to offer lower tariff rates and as a result, many high end R-Infra customers switched to T-Power in last few years (in FY12 alone ~0.2 mn consumers switched to T-Power). In last 4 years, ~0.4 mn customers migrated from R-Infra network to Tata Power network, and of these ~0.12 mn of them have been paying CSS. The directive to make CSS has been made since Jul 29, 2011. Over the last few years, both the licensees have been at loggerheads over the tariff rates, levy of surcharge and other issues. Last week, R-Infra got favorable ruling on some of these areas, which in our view could lead to improvement in their profitability as well as ease stress on their cash flows. so its a buy...tar for 1 yr 610.
Posted on: Tue, 27 Aug 2013 04:13:37 +0000
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