State-owned power distribution companies (discoms) have received Rs 75,000 crore between June 2020 and March 2021 under the special liquidity scheme announced by the central government last year.
Under the scheme, which is now closed, government-owned lenders Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) extended special one-time loans to discoms to clear their dues to the power generating companies.
The size of the loan scheme was Rs 90,000 crore, to be divided equally between PFC and REC. The firms, on the other hand, sanctioned Rs 1.3 trillion of loans. PFC and REC have cumulatively disbursed Rs 29,500 crore (Rs 14,900 crore by PFC and Rs 14,600 crore by REC) in the past two months.
ICICI Securities in a note said the additional loans take total disbursal in FY21 to Rs 75,560 crore. Further, loan sanctions have now reached Rs 1.35 trillion, an increase of Rs 10,500 crore during the same period under UDAY limit relaxation, it said.
In June 2020, the Finance Minister announced an Atmanirbhar Bharat package to boost the economy. Under this, a special liquidity infusion scheme was announced for the ailing power distribution sector.
The major beneficiaries of the scheme were Uttar Pradesh, Rajasthan and Andhra Pradesh. Additional disbursals have been mainly to UP, Telangana, TN and Bihar. This has resulted in clearing of dues of CPSU gencos, transcos and Coal India.
“Given that many discoms are comfortable with the conditions laid out to avail tranche-II loans, disbursals are expected in Q1FY22 onwards. NTPC, Coal India and NHPC remain our top picks in PSU space in the sector,” ICICI Securities said.