Farm power hived off, ‘Mahavitaran IPO in 6-9 mths’

Mumbai: The state cabinet on Tuesday approved the proposal to launch Mahavitaran's initial public offering (IPO)—which will make it India's first power distribution company to be listed on the stock market—even as it cleared the bifurcation of Maharashtra State Electricity Distribution Company Ltd (MSEDCL) into two independent companies. While one—Mahavitaran —will serve industrial, commercial, domestic and other non-agricultural consumers, the other—MSEB Solar Agro Power Ltd (MSAPL)—will provide electricity supply and related services exclusively to agricultural consumers. Mahavitaran's IPO is planned to be launched in 6-9 months, said govt sources. The restructuring and the IPO plan are aimed at managing the state-run discom's growing debt while ensuring stable and uninterrupted power supply. MSEDCL has an overall debt of around Rs 90,000 crore, with agricultural arrears alone accounting for more than Rs 75,000 crore. The IPO will be brought through a fresh issue of new shares and an offer for sale of govt-held shares, providing Mahavitaran with capital for expansion, including smart metering and digital distribution systems, investment related to energy transition, and modernisation of the distribution system. The necessary approvals and financial processes will be completed with markets regulator Sebi. Govt has guaranteed around Rs 32,679 crore in loans taken by MSEDCL for various infrastructure schemes. It will issue long-term govt bonds with a 15-year tenure. "After MSEDCL's financial restructuring, the electricity distribution business will be conducted by the two independent companies, with separate accounts maintained for electricity sales, revenue and expenditure details," an official said. The cabinet approved providing Rs 2,500 crore as initial capital to MSAPL.

End of Article