Government Plans IPOs for Five State-Run Power Companies

The Indian government plans to list five state-run power companies on the stock market to raise funds for expansion. These companies are Andhra Pradesh Power Generation Corporation, Gujarat Energy Transmission Corporation, Tamil Nadu Transmission Corporation, Rajasthan Rajya Vidyut Prasaran Nigam, and Maharashtra State Electricity Transmission Company.

The government also wants to privatize state-run distribution companies. These companies face problems like tariff limits, rising power costs, high transmission and distribution losses, and delayed payments from consumers. States have asked for the Centre’s help in privatizing distribution utilities to improve service efficiency and reliability. To deal with financial issues, the government has formed a group of ministers. However, the power secretary said there will be no financial bailout. The government may list some distribution companies on stock exchanges if they reduce their losses.

As of 2023-24, the total losses of distribution companies in India were Rs 6.92 trillion, with a debt of Rs 7.53 trillion by the end of FY24. Experts suggest phased tariff adjustments, reducing technical and commercial losses, and optimizing power purchase costs to improve the financial health of these companies.