Maharashtra is preparing an IPO for its power distribution arm MSEDCL, aiming to raise $500 million to $1 billion. The move, supported by balance sheet restructuring and business separation, could mark a rare listing in the sector and test reforms in Indias loss-making electricity distribution industry amid improving financial performance.

India’s richest state is said to prepare for power utility IPO

Maharashtra, India’s richest state, has begun preparations for an initial public offering of its power distribution utility, according to people familiar with the matter.

Maharashtra State Electricity Distribution Co. is working with SBI Capital Co. and Deloitte on the proposed share sale that could raise anywhere between $500 million and $1 billion, the people said, asking not to be identified as the information is private.

SBI Capital and Deloitte are reviewing the company’s structure and balance sheet and will advise on IPO readiness, the people said. Once the framework is finalised, the company is expected to issue a request for proposals to appoint additional advisers and law firms, they added.

The offering could include a mix of fresh shares and a stake sale, with a potential dilution of about 10% by state-governed MSEB Holding Co., the people said.

Deliberations are ongoing, and key details such as the size and timing of the offering remain under discussion and could change, the people said. Representatives for MSEDCL, SBI Capital and Deloitte didn’t respond to requests for comments.

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MSEDCL’s IPO could become one of India’s first listings of a government-controlled electricity distribution utility, a potential test case for a long-pending overhaul of the industry. The state’s cabinet of ministers has approved a revamp of the company, including a plan for the government to take over about 330 billion rupees ($3.5 billion) of the utility’s liabilities, a move intended to strengthen its balance sheet before the IPO.

In preparation for the deal, the company has started the process of splitting off its agriculture business, which is heavily dependent on government subsidies and has historically weighed on finances, according to Managing Director Lokesh Chandra. He declined to comment on the specifics of the IPO plan on the record.

If completed, the listing would mark a rare capital markets debut by a state-owned power distribution company in India, a segment historically burdened by high losses, weak bill recovery and political interference. It also comes at a time when IPO markets in India have emerged among key global destinations for capital raising.

“This could be a game-changer for the sector,” Chandra said in an interview last week. “Distribution companies are often seen as loss-making, but that’s not inherently true. If structured properly, they can be profitable and even dividend-paying.”

Maharashtra, India’s second-most populous state with more than 127 million inhabitants and Mumbai as its capital, is home to companies such as billionaire Mukesh Ambani’s Reliance Industries Ltd. and the salt-to-software conglomerate Tata Group, as well as India’s two main stock markets and the country’s film industry.

MSEDCL, which serves about 34 million consumers, swung to a profit of about 9 billion rupees in the year through March 2025, with revenue of about 1.2 trillion rupees, according to Chandra.

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