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 Company Ltd has reported an increase in shareholding by Life Insurance Corporation of India (LIC), crossing the 5% threshold that triggers mandatory disclosure under SEBI regulations. The state-owned insurance giant filed the disclosure on December 12, 2025, following its latest share acquisition in the power utility company.

Transaction Details

LIC acquired 4,50,000 shares of Tata Power through market purchase on December 11, 2025. This transaction increased the insurer's total shareholding from 15,96,13,645 shares to 16,00,63,645 shares.

Regulatory Compliance

The disclosure was made under Regulation 29(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. This regulation mandates disclosure by any person or entity holding more than 5% shares in a listed company. LIC's crossing of this threshold necessitated the formal notification to Tata Power's management and the stock exchanges.

Share Capital Context

At the time of the transaction, Tata Power's equity share capital stood at ₹3,19,53,39,547.00. The company's shares are listed on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), where the acquisition took place through regular market operations.

Institutional Investment Significance

LIC's increased stake in Tata Power reflects the insurance corporation's investment strategy in the power sector. As one of India's largest institutional investors, LIC's shareholding movements are closely watched by market participants. The acquisition, while modest in percentage terms, represents a significant absolute investment given Tata Power's market capitalization.

The disclosure document was filed by LIC's Central Office Investment Department and copied to both NSE and BSE as per regulatory requirements. This transaction demonstrates continued institutional interest in Tata Power's equity, particularly from government-owned financial institutions.