Electricity regulator CERC has asked Reliance Power to elucidate the benefits reaped by the company from its Initial Public Offering which came out in February 2008, and how has it brought down the cost of equity of its flagship Sasan ultra mega power project.
Reliance Power had petitioned the Central Electricity Regulatory Commission (CERC) seeking compensation for its 4,000 Sasan UMPP in Madhya Pradesh due to rupee depreciation.
While hearing the petition on Tuesday, the Commission asked Reliance Power to provide details of benefits received by them from the company’s IPO and how has it helped in bringing down the cost of equity of the Sasan plant.
Reliance Power came out with an IPO in February 2008 which had offered equity shares at a price band of Rs 405-450 a share.
The company had offered 26 crore equity shares, including the promoters contribution of 3.2 crore shares. The net issue to the public constituted 22.8 crore shares.
Reliance Power through its subsidiary Sasan Power Ltd is setting up the 4,000 MW ultra mega power project at Sasan in Madhya Pradesh.
The company bagged this project in 2007 in a global tender quoting the lowest ‘levelised’ tariff of Rs 1.19 per unit for 25 years.
As per the Power Purchase Agreement (PPA) between the developer of the project and procurer of electricity, the company can approach CERC for any Change in Law during the construction period and fluctuation in the value of the rupee.
An UMPP is a power plant of at least 4,000 MW generation capacity.
