Tata Power Shares Slump Nearly 5% After Singapore Court Setback, $640 Million Liability Raises Profit & Cash Flow Concerns

Mumbai: Tata Power shares fell nearly 5 percent on August 27 after the Singapore International Commercial Court dismissed all its challenges against a USD 490.32 million arbitration award favouring Kleros Capital Partners.

At 11:37 am IST, the stock traded at Rs 349.60 on the NSE, down Rs 14.40, or 3.96 percent. It opened at Rs 359.20, also its intraday high, before falling to a day’s low of Rs 348.10. The previous close was Rs 364.

Award Rivals Annual Profit

The original award is worth around Rs 4,700 crore, nearly matching Tata Power’s reported FY26 profit after tax of Rs 5,118 crore.

The dispute relates to a Russian coal project. Kleros alleged that Tata Power breached a non-disclosure agreement and used confidential information while excluding it from an investment opportunity.

Arbitration began in November 2020. In July 2025, the tribunal ordered Tata Power to pay $490.32 million for Kleros’ lost investment and profit opportunity.

Liability May Exceed Rs 6,000 Crore

The award carries simple annual interest of 5.33 percent from November 30, 2020, until payment. Tata Power must also bear legal costs of SGD 8.29 million and arbitration expenses of about SGD 2.96 million.

Kleros’ law firm claims the overall liability has crossed USD 640 million, potentially exceeding Rs 6,000 crore. Tata Power, however, plans to appeal.

Provisioning Concerns Intensify

Tata Power had not recognised any provision or adjustment for the award in its FY26 financial statements, relying on legal advice while challenging it.

Investors fear the company may now need to record a substantial provision or make a large cash payment, potentially affecting debt, cash flows and renewable-energy capital expenditure.

What Happens Next?

Tata Power has 28 days from August 26 to approach the Singapore Court of Appeal. Filing an appeal does not automatically suspend enforcement of the award.

Investors should closely monitor interim relief, provisioning decisions and the impact on finances. Brokerage targets range from Jefferies’ Rs 355 to ICICI Securities’ Rs 485, but estimates may be reassessed after the ruling.