Reliance Infra's BSES JV to recover Rs 28,483 crore regulatory assets by March 2028 following SC ruling

Reliance Infrastructure Ltd-led joint venture BSES, in which the Delhi government holds a 49 per cent stake, has been cleared to recover recognised regulatory assets worth Rs 28,483 crore by March 31, 2028, following a Supreme Court ruling delivered on August 6, 2025.

The judgment brings to a close writ petitions and civil appeals filed in 2014 by BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd -- material subsidiaries of Reliance Infra -- challenging non-cost-reflective tariffs, the unlawful creation of regulatory assets and delays in their liquidation.

After extensive hearings involving state governments and electricity regulators, the apex court had reserved its verdict on February 20, 2025, before issuing its detailed order this week.

In its ruling, the court set out ten guiding principles and nine binding directions to Electricity Regulatory Commissions and the Appellate Tribunal for Electricity to ensure cost-reflective tariffs and the timely clearance of regulatory assets.

It emphasised that tariffs must reflect actual costs, revenue gaps should be permitted only under exceptional circumstances, and regulatory assets should be limited to a reasonable level—taking Rule 23 of the Electricity Rules, 2005, which prescribes three per cent of the approved Aggregate Revenue Requirement, as a benchmark.

The judgment also mandated that any newly created regulatory asset be liquidated within three years, while existing ones must be cleared within four years starting April 1, 2024.

The Delhi Electricity Regulatory Commission (DERC) has already approved the recovery of Rs 28,483 crore in regulatory assets for the BSES distribution companies as of July 31, 2025. In accordance with the SC's directions, the entire amount is to be recovered by March 31, 2028.

Meanwhile, shares of RInfra fell 3.01 per cent to close at Rs 273.45.