Is it true that Tata Power has been aggressively reducing its debt levels at the Mundra unit?

You are right and the deleveraging has been happening rapidly. In fact, Tata Power’s Mundra unit made a second repayment of bank loans worth Rs.1550 crore to its lenders. This is in line with broad goal of reducing debt at the power unit at Mundra.

This comes on top of the Rs.2600 crore of loans repaid by Mundra plant in October taking the total loans repaid in the last two months to Rs.4150 crore. Tata Power Mundra unit has been in trouble for several years due to lower contracted tariff and higher global coal costs.

Tata Power has gross debt of Rs.44,495 crore and net debt of Rs.36,480 crore. It has set an internal target to bring down net debt to below Rs.25,000 crore to reduce financial risk on its balance sheet and make the business more viable.