Power Grid Corporation of India: 3% with retail
Large network of transmission assets with satisfactory operational performance -As on September 30, 2025, PGCIL owned transmission lines of 1,81,054 circuit kilometres (ckm)and 287 substations with transformation capacity of 5,82,516 MVA on a consolidated basis (including subsidiaries). Overall, as of September 2025, PGCIL owns ~84% of the inter-regional capacity of the country. It has demonstrated consistently high system average availability of 99.83% in the last two financial years against
the minimum target of 98%, as per the CERC norms, ensuring the recovery of annual transmission charges and earning incentive for the availability being higher than the normative levels.
Cost-plus tariff for majority assets ensures healthy return on equity
-The company generates stable revenues and cash flows as a significant portion (~ 94.5% of its revenues) of the transmission assets are commissioned under the cost
-plus tariff norms set by the CERC for transmission projects. The components of the annual transmission charges include return on equity, tax on return on equity, interest on term loan, interest on working capital loan, operations and maintenance expenses and
depreciation. The company needs to ensure network availability above the normative level of 98% to recover the annual transmission charges
-The company is exposed to the weak financial profiles of its counterparties i.e. the state distribution utilities. However, the company has demonstrated a satisfactory collection efficiency in the range of 97.9%-103.8% for the past 5 years till September 2025. Further, the availability of letter of credit amounting to 1.05 times the monthly billing
under the terms of the transmission service agreement, options for regulation of power supply and invocation of TPA in case of non-payment of dues mitigate the counterparty credit risk to some extent
Large network of transmission assets with satisfactory operational performance -As on September 30, 2025, PGCIL owned transmission lines of 1,81,054 circuit kilometres (ckm)and 287 substations with transformation capacity of 5,82,516 MVA on a consolidated basis (including subsidiaries). Overall, as of September 2025, PGCIL owns ~84% of the inter-regional capacity of the country. It has demonstrated consistently high system average availability of 99.83% in the last two financial years againstthe minimum target of 98%, as per the CERC norms, ensuring the recovery of annual transmission charges and earning incentive for the availability being higher than the normative levels.Cost-plus tariff for majority assets ensures healthy return on equity-The company generates stable revenues and cash flows as a significant portion (~ 94.5% of its revenues) of the transmission assets are commissioned under the cost-plus tariff norms set by the CERC for transmission projects. The components of the annual transmission charges include return on equity, tax on return on equity, interest on term loan, interest on working capital loan, operations and maintenance expenses anddepreciation. The company needs to ensure network availability above the normative level of 98% to recover the annual transmission chargesExposure to state distribution utilities with weak financial profiles-The company is exposed to the weak financial profiles of its counterparties i.e. the state distribution utilities. However, the company has demonstrated a satisfactory collection efficiency in the range of 97.9%-103.8% for the past 5 years till September 2025. Further, the availability of letter of credit amounting to 1.05 times the monthly billingunder the terms of the transmission service agreement, options for regulation of power supply and invocation of TPA in case of non-payment of dues mitigate the counterparty credit risk to some extentExecution risk associated with under-construction projects–The company is exposed to execution risks for its under-construction project pipeline amounting to Rs. 1,52,287 crore as of September 2025,which is to be executed over the next few years and is a mix of competitively bid projects and projects awarded under regulated tariff mechanism route.The total capex expected to be incurred in FY2026 is around Rs. 28,000 crore, which is 9.8% of its total gross block reported as onSeptember 30, 2025.Moreover, the execution risk is mitigated by PGCIL’s superior execution capabilities and the long track record of executing large scale and complex transmission line projectsCost-plus tariff for majority assets ensures healthy return on equity -The company generates stable revenues and cash flows as a significant portion (~ 94.5% of its revenues) of the transmission assets are commissioned under the cost-plus tariff norms set by the CERC for transmission projects.The components of the annual transmission charges include return on equity, tax on return on equity, interest on term loan, interest on working capital loan, operations and maintenance expenses anddepreciation.The company needs to ensure network availability above the normative level of 98% to recover the annual transmission charges.The company plans to incur a capex of Rs. 28,000 crore in FY2026, Rs. 35,000 crore in FY2027 andRs. 45,000 crore in FY2028, whereas the capitalisation is expected to be around Rs. 20,000 crore in FY2026, Rs. 25,000 in FY 2027 and about Rs. 28,000 crore in FY2028.Future capex is expected to be funded through 70- 80% of debt, and the remaining will be met through internal accruals
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