Torrent Power, Lanco Infra shares gain on hopes of cheap gas

Torrent Power and Lanco Infratech shares jumped 6.90 per cent and 4.10 per cent to Rs 168.85 and 5.08, respectively, in the early trading session after their plants won bids to receive cheap imported R-LNG that would help supply them enough fuel to help bring them up to 35 per cent capacity.

The auction were a result of the government's recent decision to supply subsidised gas to stranded power plants, with a total 27000 megawatt capacity, that have not been operating for lack of fuel.

"... the revival of 10 stranded gas-based power generation plants who have successfully bid through a most transparent and competitive reverse e-auction process for generating 5.05 billion units of electricity which will be supplied at or below Rs 4.70 per unit to distribution companies during the peak summer months from 1 June 2015 to 30 September 2015," the Ministry of Power said in a statement.

This will involve government support of Rs 723.99 crore from the Power System Development Fund.

Companies that won bids to recieve the gas supply included Lanco Infratech (for its 1108 MW Kondapalli plant) and Torrent Pharma (for its 1200 MW DGEN plant).

India's total gas-based power generation capacity is 27,123 MW. Of this, plants with capacity of 14,305 MW are stranded due to non-supply of gas while those with 9,845 MW receive limited domestic gas.