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.

Tata Power has successfully completed the allotment of non-convertible debentures (NCDs) worth ₹2,000 crores through private placement on December 19, 2025. The Committee of Directors approved the allotment following coupon rate discovery through the Electronic Book Building Platform of BSE Limited on December 18, 2025.

Allotment Details and Coupon Rates

The company allotted 2,00,000 NCDs with a face value of ₹1,00,000 each, structured in two series with different coupon rates discovered through multiple yield allotment method. The NCDs are unsecured, senior, redeemable, rated, listed, taxable, non-cumulative non-convertible debentures offered to identified investors on private placement basis.

Issue Structure and Terms

The total issue size aggregates to ₹2,000 crores, with equal allocation between both series. The NCDs carry fixed rates and will be redeemed through bullet repayment at maturity. The allotment was made on the terms and conditions mentioned in the Placement Memorandum and other transaction documents.

Listing and Credit Quality

The NCDs are proposed to be listed on the Wholesale Debt Market Segment of BSE Limited. The debentures carry strong credit ratings of AA/Stable from both India Ratings and Research Private Limited and CRISIL Ratings Limited, indicating high credit quality and low credit risk for investors.

Regulatory Compliance

This allotment continues the company's previous intimation dated December 12, 2025, regarding the proposed issuance. The disclosure complies with Regulation 30 and 51 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The issuance follows the multiple yield allotment method prescribed by BSE Limited and SEBI, with issue prices determined accordingly.