'Power' packed move: Cabinet approves Mahavitaran recast, IPO plan, separate agri energy firm

Synopsis

Maharashtra's state-owned power distribution firm will be split into two entities under a financial restructuring plan approved by the state cabinet on Tuesday and one of it will be listed on bourses after an IPO is launched within six to nine months of the recast process.

Maharashtra's state-owned power distribution firm will be split into two entities under a financial restructuring plan approved by the state cabinet on Tuesday and one of it will be listed on bourses after an IPO is launched within six to nine months of the recast process.

The cabinet approved the financial restructuring of Maharashtra State Electricity Distribution Company Ltd (MSEDCL or Mahavitaran), including its bifurcation and plan to launch an initial public offering (IPO) of non-agricultural business, at its meeting chaired by Chief Minister Devendra Fadnavis.

Under the restructuring, Mahavitaran will be split into two entities -- one catering to industrial, commercial, domestic and other non-agricultural consumers, while the second company, MSEB Solar Agro Power Ltd (MSAPL), will be dedicated to supplying electricity to agricultural consumers, the Chief Minister's Office (CMO) said in a statement issued after the cabinet meeting.

The cabinet approved listing of the non-agricultural distribution business of Mahavitaran in the capital markets through an IPO within six to nine months after the restructuring. The IPO will include a mix of fresh equity issuance and an offer for sale by the state government, it said.

As part of the financial restructuring, the Maharashtra government will issue long-term bonds with a tenure of 15 years to address Mahavitaran's debt liabilities of about Rs 32,679 crore, which carry state guarantees, according to the statement.

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The move is expected to reduce the utility's debt burden and improve its financial health.

The newly-created firm MSAPL will focus on agricultural power supply and development of solar-based energy systems for farming, aligned with the Mukhyamantri Saur Krishi Vahini Yojana 2.0.

The cabinet approved an initial capital support of Rs 2,500 crore for MSAPL.

The restructuring aims to ensure energy security, improve service quality and bring sustainability in power distribution. It is also expected to facilitate investments in smart metering, digital distribution systems, grid modernisation and energy transition, according to the CMO.

The government said the move will help provide reliable and uninterrupted power supply to all consumer categories, with a particular focus on ensuring availability of daytime electricity to farmers and promoting solarisation in the agriculture sector.

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