Discoms’ dues to generators rise 48% to Rs 1.27 lakh crore

The Covid-19 pandemic continues to have a wider impact on the country’s power sector in the current financial year with the acute slowdown witnessed in the first quarter period carrying on further, albeit at a lot lower levels, affecting both demand and supply and hiking the stress levels of state discoms.

According to analysts, the poor run for the sector during the pandemic has led to a further deterioration in the financial position of the power distribution companies (discoms) as their pending dues to power generation companies (gencos) have shot up 48 per cent year-on-year (4 per cent month-on-month) to Rs 1.27 lakh crore as of September 2020.

The rise is despite the Rs 1.2 lakh crore liquidity window opened by the Centre under Aatmanirbhar mission. While the liquidity being released by the REC and the Power Finance Corporation (PFC) is helping discoms clear their dues to gencos, their overall poor financial position keeps adding to outstanding every month.

Discoms’ total outstanding stood at Rs 1.39 lakh crore (+ 28 per cent YoY/+3 per cent MoM)– breaching its November 2015 peak of Rs 1.35 lakh crore.

Discoms in key states — Rajasthan, Tamil Nadu, Uttar Pradesh, Karnataka, Maharashtra, J&K and Telangana — account for 79 per cent of the total overdue to gencos.

According to an analysis done by Emkay Global Financial Services, the discoms’ overdues could take a while to moderate as power generation saw a sharp pick-up in October 2020 against which additional receivables could be formed.

However, the improvement in discoms’ collection efficiencies and increased disbursement under the Atmanirbhar scheme should curtail further expansion of overdues, it added.

The Central government has extended the liquidity package under the Atmanirbhar scheme to Rs 1.2 lakh. Till date, PFC and REC have sanctioned loans worth Rs 1.18 lakh crore to discoms. Of this, Rs 31,100 crore worth of loans have been disbursed to 11 states.

As per the brokerage report, among all discoms, the Rajasthan discom has the highest share of 30 per cent in the total overdue at Rs 37,900 crore (+37 per cent YoY and +2 per cent MoM), followed by Tamil Nadu discom with a 17 per cent share at Rs 20,900 crore (+38 per cent YoY and 5 per cent MoM) and Uttar Pradesh with a nine per cent share — Uttar Pradesh saw its outstanding dues rise to Rs 11,500 crore in September 20 20 up 43 per cent YoY (4 per cent MoM).

On the MoM basis, Telangana and Karnataka saw their dues rise seven per cent and five per cent respectively in September, the highest among the major states. On the contrary, Maharashtra’s dues remained flat at Rs 7,500 crore in September vs. August.

Of the total overdues to gencos, CPSEs have the highest share at 37.2 per cent, followed by independent power producers (32.8 per cent), state gencos (21.6 per cent) and renewable energy producers (8.4 per cent).

Among private gencos, Adani Power has the highest share in the total overdue at Rs 202 billion (49 per cent of IPPs overdue/16 per cent of total overdue), while NTPC has the highest overdue among the CPSEs at Rs 258 billion (47 per cent of CPSEs/18 per cent of total overdue).