Tata Power , a leading Indian power company, has completed its third installment of ₹64 crore towards its strategic investment in Bhutan's Khorlochhu Hydro Power Limited (KHPL). This latest tranche is part of a larger ₹830 crore deal to acquire a 40% stake in the Bhutanese hydropower project, marking continued progress in the company's clean energy expansion strategy.

Latest Investment Update

The company has now invested a total of ₹184 crore across three tranches in the 600 MW hydropower project. The latest investment details are:

Transaction Progress

This investment represents the third installment following previous tranches disclosed in August 2024, October 2024, July 2025, and November 2025. The Share Purchase Agreement has been executed between Tata Power, the existing shareholder of KHPL, and KHPL itself. The remaining investment tranches are expected to be completed over the stipulated five-year period.

Strategic Significance

The Khorlochhu Hydropower Project aligns with Tata Power's commitment to accelerating its transition towards clean and green energy. This 600 MW project represents a significant addition to the company's renewable energy portfolio and strengthens its position in the hydropower sector.

Regulatory Framework

The transaction has been structured in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has confirmed that this investment does not fall under related party transactions, and no Indian governmental or regulatory approvals were required for this acquisition. KHPL has become an associate company of Tata Power following the investment.

Project Entity Details

KHPL, incorporated on June 12, 2015, had a net worth of Nu. 6,080 million (approximately ₹608.00 crore) as of December 31, 2024. The company continues to develop this significant hydropower project in Bhutan as part of the broader regional clean energy infrastructure development.

This strategic investment demonstrates Tata Power's continued commitment to expanding its clean energy footprint and contributing to sustainable power generation in the region.

Investment banking firm Morgan Stanley has issued a research note projecting that Tata Power 's earnings per share (EPS) may face headwinds from Indonesia's newly implemented coal tax policy. The brokerage firm estimates that the company's FY27-28 EPS could be impacted by approximately 4-5% due to this regulatory change.

Impact Assessment

The projected EPS impact reflects the potential increased cost burden that Tata Power may face due to Indonesia's coal tax implementation. As one of India's leading power generation companies, Tata Power's operations could be affected by higher procurement costs for Indonesian coal, which serves as a key input for thermal power generation.

Operational Implications

The coal tax implementation by Indonesia represents a regulatory shift that could influence the cost structure for power generation companies dependent on Indonesian coal imports. For Tata Power, this development may necessitate strategic adjustments in fuel sourcing and cost management to mitigate the projected earnings impact.

Market Context

Morgan Stanley's analysis provides investors with insight into potential medium-term challenges facing Tata Power's profitability. The 4-5% EPS impact projection for FY27-28 suggests that the effects of Indonesia's coal tax policy may have implications for the company's financial performance over the next few fiscal years.