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24 Apr 2026
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MUMBAI: The Maharashtra government has approved a sweeping financial restructuring of the Maharashtra State Electricity Distribution Company Ltd (MSEDCL), including taking over Rs 32,679 crore of its debt, carving out its agriculture business, and paving the way for a potential stock market listing of its non-agriculture arm, according to a government resolution (GR) issued on April 21. The GR allows the state to assume MSEDCL’s government-guaranteed liabilities of Rs 32,679 crore and repay them through the issuance of 15-year government bonds. The bonds will carry a moratorium on principal repayment for the first 10 years, with only interest servicing during this period, followed by repayment over the next five years. Officials said the move is aimed at reducing the utility’s debt burden and strengthening its balance sheet, which has been under stress due to mounting agricultural dues and rising borrowing to bridge revenue gaps. As part of the restructuring, the state has approved the demerger of MSEDCL’s agriculture power distribution business into a separate entity, MSEB Solar Agro Power Ltd, which will exclusively serve farm consumers. The non-agriculture business will continue to cater to industrial, commercial and residential users. The GR also clears the listing of the non-agriculture distribution business through an initial public offering (IPO) after financial stabilisation, with the process expected to be taken up within 6–9 months of the demerger. To support the new agriculture entity, the government has approved setting up an escrow mechanism for subsidy payments and extending around Rs2,500 crore as working capital support or guarantee. The resolution further permits writing off agricultural arrears of Rs32,679 crore from MSEDCL’s books as part of balance sheet clean-up, while remaining dues will be restructured through equity or grants within the holding company framework. The restructuring plan, effective April 1, 2026, aims to improve financial transparency, reduce cross-subsidy burdens, and enhance efficiency in power distribution. MSEDCL, the country’s largest power distribution utility with about 3.4 crore consumers, has faced persistent financial strain due to high agricultural receivables and subsidy gaps. The government said the reforms are designed to ensure long-term sustainability of the distribution sector while maintaining reliable and affordable power supply. A high-level committee headed by the chief secretary will monitor implementation of the restructuring plan and address inter-departmental issues.
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