Despite cash infusion, discoms' dues to power companies near record high at Rs 1.33 lakh crore

Despite the government's liquidity infusion to improve financial health of power distribution companies (discoms), their pending dues to power generation companies (gencos) have grown 40 per cent year-on-year to nearly Rs.1.2 lakh crore as of August, rising closer to the November 2015 peak of Rs 1.35 lakh crore. Their total outstanding stood at Rs 1.33 lakh crore and is up 38 per cent year-on-year, noted a recent analyst report.

Discoms in Rajasthan, Tamil Nadu, Uttar Pradesh, Karnataka, Maharashtra, J&K and Telangana account for 81 per cent of the total overdue to gencos. Of the total overdue, CPSEs have the highest share at 36.6 per cent, followed by independent power producers (32.1 per cent), state gencos (22.3 per cent) and renewable energy producers (9.1 per cent). Among private gencos, Adani Power has the highest share in the total overdue at Rs 20,100 crore (52 per cent of IPPs overdue and 17 per cent of total overdue). Similarly, dues owed to NTPC are the highest among CPSEs at Rs 23,500 crore, said an October 7 sector update report of brokerage Emkay Global.

Under the Atmanirbhar scheme, public sector power financiers such as Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) have till date sanctioned Rs 90,800 crore (REC - Rs 54,400 crore and PFC - Rs 36,400). Of this, disbursements so far were Rs 27,900 crore (REC - Rs 15,200 crore and PFC - Rs 12,700 crore). Main disbursements are for Andhra Pradesh (Rs 3,300 crore), Telangana (Rs 6,300 crore), Maharashtra (Rs 2,500 crore and Uttar Pradesh (Rs 10,470 crore). The balance sanctioned amount is expected to be disbursed over the next two-three quarters as and when state governments adhere to the terms and conditions set by PFC/REC, said analyst Anuj Upadhyay in the report. Finance Minister Nirmala Sitharaman in May had announced a Rs 90,000 crore liquidity infusion into cash-strapped discoms for payment of their dues till March 2020.

Payments had particularly slowed in Q1 due to lower collections amid COVID-19-related woes. However, there is an improvement in payments made to gencos against the overdue amount in August 2020 (9.3 per cent versus an average payment of 5.9 per cent in Q1FY21). If gencos were paid Rs 3900 crore in March, it slumped to Rs 2,200 crore in April and to Rs 1,500 crore in May. In June, payments were Rs 1,800 crore, Rs 1,700 crore in July and Rs 1,620 crore in August. The collections by discoms are expected to decline to 93 per cent in FY21 as against historical average of 98-99 per cent on account of weak Q1FY21 collections, said the report.

Overall power demand in India has improved to pre-COVID level in September, largely led by easing of restrictions and resumption of commercial and industrial activities across the country. Going forward, demand should continue to recover as economic activities pick up, but annual demand in the country will likely see an 8 per cent year-on-year fall due to the subdued power demand during the lockdown period, said the Emkay report.

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