Public listing of power utilities likely to pick up pace across states

Public listing of state-owned power utilities, including generating, transmission, and distribution companies (gencos, transcos, and discoms), is expected to accelerate, with around half-a-dozen firms evincing interest in the same. Government sources said advanced-level discussions are underway with States like Gujarat, Chhattisgarh, and Haryana, to list one or more of their utilities.

 

Out of these, Gujarat Energy Transmission Company (Getco) is leading with initiating the process of preparation of a draft red herring prospectus (DRHP), said officials in the know of the matter. In recent meeting held by the Union Ministry of Power, Chhattisgarh has proposed the listing of two utilities — Chhattisgarh State Power Generation Corporation ltd (CSGPL), and Chhattisgarh State Power Transmission Corporation Ltd (CSPTL) — and Haryana has mooted listing Haryana Power Generating Company Ltd (HPGCL).

 

The deliberations of the Centre with the states commenced earlier this year, after the announcement by Union Power Minister M L Khattar that states should consider listing their profit-making power utilities to generate more revenue. “Those states that have good performing gencos or transcos, and even discoms, should consider listing them on exchanges,” Khattar said at the concluding session of the State Power Ministers' Conference in New Delhi in December 2024. “The first in line can be transcos, followed by gencos. Discoms are usually not financially healthy, so states should improve their prospects and rankings before considering their listing,” Khattar had said then.

 

Email queries sent to spokesperson of Ministry of Power did not elicit response till the time of going to press. 

 

Sector experts said listing of discoms is extremely difficult as most of them are loss-making. “The solution for the discoms is to look for privatisation or several models of public-private partnership (PPP),” one of the experts said, adding that states like Odisha have shown the way for successful privatisation. 

 

The current cumulative debt of discoms is ₹6.84 trillion, and their accumulated losses stand at ₹6.46 trillion as of now. The cost-revenue gap was at ₹0.21 per kWh in financial year 2023-24 (FY24), which the Centre is trying to bring down to zero.

 

Currently, Uttar Pradesh is in the process of awarding two of its discoms — Dakshinanchal Vidyut Vitran Nigam Ltd, and Purvanchal Vidyut Vitran Nigam Ltd — under PPP mode to a private player. In an interview with Business Standard last week, Praveer Sinha, managing director and chief executive officer, Tata Power, had said the company is interested in these discoms and is “observing closely the tender developments”. 

 

Tata Power is the leading private player in the power distribution segment, operating in parts of Delhi, Mumbai, and whole of Odisha as an electricity supplier.

 

Senior officials indicated that while the discussion is ongoing with several states, some like Andhra Pradesh, which initially showed interest, seem to have changed their mind. “Andhra Pradesh is not exploring listing options at the moment. While the Centre has held meetings with state-level entities based on their financial situations, the state government is not keen on pursuing a listing,” said an Andhra Pradesh government official.

 

Another expert said listing might not be the only option that states are looking at. “Some states are considering different monetisation models as well, apart from listing. Transcos can also consider the Infrastructure Investment Trust (InvIT) structure. The idea is to maximise revenue from the existing assets of the state-owned utilities and make them self-sustaining,” he said.

 

In 2023, a Tamil Nadu Generation and Distribution Corporation-led committee had proposed that states should explore newer avenues of financing for discoms. The panel has discussed monetising assets of discoms, such as power transmission assets, and land banks. One mode of monetisation proposed is the InvIT route. 

Plans afoot 

• Gujarat Energy Transmission Company has started preparing draft red herring prospectus 
• Chhattisgarh proposes listing of two utilities — CSGPL and CSPTL
• Haryana moots listing Haryana Power Generating Company 
• Currently, Uttar Pradesh is in the process of awarding two of its discoms to a private player under the PPP mode