Govt Plans IPOs - Business Outrank

The government is to raise money through Initial Public Offerings (IPOs) of five state-owned power generation and transmission companies in order to raise funds for capacity expansion. Out of the firms identified, Andhra Pradesh Power Generation Corporation and Gujarat Energy Transmission Corporation are now inviting merchant bankers for the listing process. Besides IPOs, the government is examining the possibility of privatization of struggling state-owned distribution companies (discoms). These discoms have their own problems, including the increase in power purchase costs, high T&D losses, and customer payment delays. In order to enhance the efficiency and reliability, a number of states have asked the Centre to help them in privatizing distribution utilities. A financial bailout for discoms has been rejected, but the government is thinking about stock market listings for some discoms if they cut their losses significantly. As of FY24, discoms reported cumulative losses of ₹6.92 lakh crore and outstanding debt of ₹7.53 lakh crore. Despite improvements in subsidy payments and a closed cost-revenue gap, financial strain continues to exist. DT experts advise staggered tariff revisions, lower AT&C losses, and cost-effective power procurement to build sound discoms. In the meantime, the government continues to focus on the management of peak power demand which is expected to reach 335 GW by 2030 and at the same time raise funds for the growth of the sector.

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