Antique bets on Power Grid Corp, CESC amid Electricity Bill 2025 reforms

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Domestic brokerage Antique Stock Broking has identified Power Grid Corporation of India Limited (PGCIL) and CESC as top picks in the utilities sector, following the release of the draft Electricity (Amendment) Bill 2025 by the Ministry of Power (MoP), signaling a potential turning point for India’s power sector.

 

As of 9:30 AM, Power Grid shares were trading 0.59 per cent lower at ₹287.45, while CESC fell 0.64 per cent to ₹169.95. By comparison, the BSE Sensex was down 0.29 per cent at 82,260.52 levels.

 

The draft bill, aimed at comprehensive reform of generation, transmission, and distribution, introduces measures that could reshape the sector’s financial and operational dynamics. 

 

On the distribution front, it mandates cost-reflective tariffs, empowering State Electricity Regulatory Commissions (SERCs) to revise tariffs suo motu from April 1 each year if State Electricity Boards (SEBs) fail to submit annual revenue requirements. The move seeks to ensure timely cost recovery, reduce systemic losses, and instill financial discipline in a sector that has accumulated cumulative losses exceeding ₹6.9 trillion as of FY25.

 

Notably, the bill proposes the complete elimination of cross-subsidies and surcharges for industrial consumers, metros, and railways over five years. This timeline provides clarity and boosts industrial competitiveness, while potentially altering the revenue structure of distribution companies. It also permits multiple distribution licensees in the same area, allowing shared network usage to prevent redundant infrastructure investment, a shift that could impact future capital expenditure plans of utilities. 

 

For renewables, the bill strengthens adoption by enforcing Renewable Purchase Obligations (RPOs) with penalties of 35-45 paise per kWh for shortfalls. This introduces the first enforceable financial consequences for non-compliance. 

 

Additionally, the Central Electricity Regulatory Commission (CERC) is empowered to implement market-based instruments, including Renewable Energy Certificates (RECs), carbon credits, Contracts for Difference (CfDs), and short-term trading mechanisms. These changes address long-standing challenges in tying up long-term Power Purchase Agreements (PPAs) for renewables and open up new revenue streams.

 

On governance, the draft bill proposes an Electricity Council, chaired by the Union Power Minister and including State Ministers, to foster consensus and ensure coordinated policy implementation, addressing a key gap from the earlier 2022 Bill.

 

Against this backdrop, Antique Stock Broking analysts have maintained a positive view of the sector, with Power Grid and CESC emerging as its preferred picks. PGCIL, a transmission major, stands to benefit from clearer tariff mechanisms and structured regulatory oversight, boosting predictability and revenue stability. 

 

CESC, with a strong distribution footprint and strategic exposure to industrial consumers, is well-positioned to navigate the cross-subsidy phase-out while leveraging regulatory reforms and potential renewable integration.

 

With the draft bill inviting stakeholder feedback over 30 days, Antique Stock Broking analysts' focus reflects confidence that, once enacted with state-level buy-in, these reforms will strengthen the financial health of utilities, improve market efficiency, and unlock long-term growth opportunities.