A major, decade-long overhang on Tata Power is set to end: Exclusive

Tata Power's long-stalled Mundra ultra mega power project is finally inching toward a resolution, setting the stage for one of the most major developments in India's power sector in over a decade.

According to sources, Mundra UMPP is likely to resume operations in December 2025 after the company and the Gujarat government reached an in-principle understanding on a supplementary power purchase agreement.

This supplementary PPA is expected to serve as a template for similar agreements with the four other buying states — Maharashtra, Punjab, Haryana and Rajasthan.

Mundra has been idle for months, with operations under Section 11 suspended for two quarters because of subdued power demand.

Tata Power had indicated during its November 16 Q2 analyst call that discussions with Gujarat were in the final stages and that closure was expected soon.

CNBC-TV18 has reached out to Tata Power for a comment and is awaiting a response.

The development could have significant financial implications for the company. The Mundra coal and shipping cluster posted a ₹171 crore profit in Q4FY25 and ₹1,078 crore profit in FY25, but slipped into a ₹362 crore loss in Q2FY26, which management attributed to the plant shutdown.

The resumption of operations and clarity on revised PPAs could help turn around the cluster's profitability.

Shares of Tata Power Company Ltd. are now trading 0.51% higher on Thursday at ₹393.50. The stock is flat on a year-to-date basis.