Adani Power shares rose to a day high of Rs 189.81 on Wednesday after the company won a 25-year power supply contract from Uttarakhand.

Adani Power Ltd received a Letter of Award from Uttarakhand Power Corporation Limited (UPCL) on Wednesday.

It came after Adani Power emerged as the winning bidder in a tender UPCL ran for long-term power supply. The company told the stock exchanges in a filing dated 14 October.

Here is what the deal covers. Adani Power will supply 1,234 MW of thermal power for 25 years under a long-term Power Supply Agreement.

MW stands for megawatt, a measure of how much electricity a plant can deliver at one time. The plant has 1,320 MW of installed capacity, and 1,234 MW is the net amount UPCL will buy at the plant gate.

A letter of award is not the final contract. It is the formal offer that confirms the company won the tender.

The filing says the award still needs approval from the Uttarakhand Electricity Regulatory Commission, which has to adopt the tariff under Section 63 of the Electricity Act, 2003.

The state signed off on the plan earlier. On 25 August, the Uttarakhand Cabinet approved buying 1,320 MW of coal-based power from Adani Power at Rs 5.746 per unit, after the company came in as the lowest bidder.

A unit is one kilowatt hour, the same unit that appears on a household electricity bill.

The cabinet also allowed UPCL to sign the supply agreement and seek the regulator’s approval. Reports quoting state officials say the price will stay the same for all 25 years.

Reports say the power will come from a coal-based project in Chhattisgarh. None of the reports gives a start date for supply.

At 12:11 pm, Adani Power traded at Rs 189.64 on the NSE, up Rs 3.68 or 1.98% from the previous close of Rs 185.96. The stock opened flat and touched a low of Rs 184.12 earlier in the session.

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