NTPC keen to buy Reliance Infra’s Delhi discoms

Reliance Infrastructure had sold its Mumbai discom business to Adani Transmission in 2018 for Rs 18,800 crore, which helped the company reduce its debt by Rs 13,800 crore.

State-run power producer NTPC wants to acquire a majority stake in BSES Yamuna (BYPL) and BSES Rajdhani (BRPL), the subsidiaries of Reliance Infrastructure that supply electricity in south, west, east and central Delhi. “It is submitted that NTPC is keen to explore the opportunities for acquiring 51% stake in BRPL and BYPL, which are on sale, provided the equity sale is done through a transparent process,” the company said in a letter, reviewed by FE, to the Delhi Electricity Regulatory Commission (DERC).

NTPC in June last year had agreed to create National Electricity Distribution Company — a joint venture with Power Grid Corporation (PGCIL) — to foray into the electricity distribution business on a pan-India basis. Discoms in Delhi, with aggregate technical (AT&C) losses of less than 8%, is considered to be an attractive geographies in the sector owing to its predominantly urban population with a large section of high-paying commercial and industrial consumers.

Delhi is perhaps one of the best examples of distribution utilities (discoms) improving efficiency under private ownership. Before privatisation in 2002, the AT&C losses of the national capital used to stay above 50%. With the aim to usher similar efficiency in Union territories (UTs), the government has recently announced that it will privatise the power departments in UTs, which it hopes will “provide a model for emulation by other Utilities across the country”.

Reliance Infrastructure had sold its Mumbai discom business to Adani Transmission in 2018 for Rs 18,800 crore, which helped the company reduce its debt by Rs 13,800 crore. At the end of FY19, the total assets of its Delhi distribution units were valued at Rs 25,526 crore. Total debt of BYPL and BRPL stood at Rs 1,900 crore at the end of FY20, sources said. As of March 2020, their revenue was Rs 15,250 crore with earnings before interest taxes depreciation and amortisation of Rs 2,050 crore.