The company recently petitioned the Maharashtra and Rajasthan electricity regulatory commissions, asking to be reimbursed for extra fuel costs incurred by its power plants.
While Tata Trust officials had raised concerns over the acquisition, Welspun Renewables’s robust earnings are now starting to partially offset the losses being racked up by the imported coal-based Mundra power plant.
The judgement also puts a much-welcome end to the ‘bid low today, raise price later’ strategy employed by players such as the Tatas and the Adani Group.
Mistry pinpoints “legacy hotspots” – certain companies that if realistically assessed could result in a write-down of nearly $18 billion.
Globally, economists and law makers recognise price volatility of commodities as a key risk which can significantly affect economic activities which depend heavily on commodity inputs.
The scam is conservatively estimated by government officials at no less than Rs 29,000 crore, a third of which is in the form of higher power tariffs.