Shares of Tata Power Company Ltd slumped 2% on 3 July after the company announced that an arbitral panel under the Singapore International Arbitration Centre (SIAC) guidelines had ordered it to pay $498 million in damages to Kleros Capital Partners.

The verdict is a blow for the corporation, raising investor fears about potential financial consequences.

The partial award, delivered by a 2:1 majority judgment, includes simple interest at a rate of 5.33% per year from 30 November 2020 until payment is received. Furthermore, Tata Power has been ordered to pay $8.29 million in legal fees, with interest accruing at 5.33% each year beginning 1 July 2025.

The case involves Tata Power’s Russian mining partner, Kleros Capital Partners Ltd., which alleged that Tata Power violated confidentiality and non-circumvention rules in their Non-Disclosure Agreement, which was signed for a prospective coal mining operation in Russia.

The company stated in a regulatory filing that it is analysing the award and may take legal action to oppose it.

Tata Power reported a 24% YoY increase in net profit in Q4FY25 at Rs 1,306 crore, while sales increased 7.9% to Rs 17,096 crore. EBITDA increased 39.2%, while margins improved to 19%.  Operating margins increased to 19% from 14.7% a year ago.

Furthermore, the Tata Power board has recommended a final dividend of Rs 2.25 per equity share for FY25. The dividend is subject to shareholder approval at the company’s 106th Annual General Meeting (AGM), which is set for 4 July 2025.

At 1:24 pm, the shares of Tata Power were trading 1.70% lower at Rs 399.75 on NSE.

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