Rs 1,227 crore order book: Piping Solutions Company Updates on Power Purchase Agreement of Wholly Owned Subsidiary

DEE Development Engineers Limited (DDEL)'s wholly-owned subsidiary, Malwa Power Private Limited (MPPL), has received a favourable regulatory update regarding its Power Purchase Agreement (PPA) with the Punjab State Power Corporation Limited (PSPCL). The PPA, which involves generating electricity from biomass like paddy straw, had expired on April 27, 2025. While PSPCL initially granted a 10-year extension, it unilaterally set the new tariff at Rs 3.50 per unit. In response, MPPL petitioned the Punjab State Electricity Regulatory Commission (PSERC) to determine the tariff, as per the PPA's Clause 12.1.0.

In a significant order dated September 18, 2025, the PSERC ruled in favour of MPPL on several key points. The Commission affirmed that the 10-year PPA extension is valid and established. Crucially, the PSERC also clarified that PSPCL does not have the authority to unilaterally fix the tariff for the extended period. The court confirmed that, according to the terms of the PPA, the PSERC itself has the sole power to determine the new tariff. The matter has been scheduled for another hearing on November 6, 2025, where the final tariff will be decided.

Management at DDEL views this development with optimism, as the ruling confirms PSERC's jurisdiction to determine the tariff. The company believes there is a strong basis for a favourable outcome, especially considering that the prior Rs 3.50 rate was set without following established procedures. DDEL expects that the PSERC will use its consistent practice of considering both variable and fixed costs when determining the new tariff, leading to a more equitable rate for MPPL. Concurrently, DDEL has also filed a separate appeal with the High Court of Punjab and Haryana, challenging a prior PSERC order that had reduced the variable cost component of the tariff for the company’s 8 MW biomass project.

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Earlier, the company received a domestic order valued at approximately Rs 170 crore from an Indian Public Sector Undertaking in the power sector. The contract is for the supply of roughly 1,900 metric tons of critical piping for two major power projects. The execution timeline for the orders varies, with delivery periods ranging from 9 to 15 months from the date of the Letter of Intent. Payment terms are set at 90% within 90 days of material acceptance at the site, with the remaining 10% paid after the completion of the purchase order.

About the Company

Dee Development Engineers Limited (DDEL) is a global leader in specialised process piping solutions, catering to sectors like oil and gas, power (including nuclear), chemicals, and other process industries. Offering a comprehensive service from design to manufacturing, DDEL produces a wide range of piping products including high-pressure systems and custom components. As India's largest player in this domain by installed capacity, the company has a strong international footprint, generating over half its revenue from markets like Canada, Thailand, and the USA.

The order book as of June 30, 2025, stood at Rs 1,227 crore and has a market cap of over Rs 1,900 crore. The stock is up by 86 per cent from its 52-week low of Rs 166.60 per share.

Disclaimer: The article is for informational purposes only and not investment advice.