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Cabinet Boosts POWERGRID's Investment Limit to Rs 7,500 Cr Per Unit

The Cabinet Committee on Economic Affairs has approved an increase in POWERGRID's permissible equity investment limit from Rs 5,000 crore to Rs 7,500 crore per subsidiary. This enhanced delegation will help the company expand investment in its core transmission business and support the evacuation of renewable energy. The move enables POWERGRID to participate in capital-intensive projects like Ultra High Voltage transmission networks. It is also expected to broaden competition in tariff-based bidding for critical transmission projects.

Key Points: Cabinet Raises POWERGRID's Equity Investment Limit to Rs 7,500 Cr

  • Equity limit raised to Rs 7,500 crore per subsidiary
  • Supports 500 GW renewable energy target
  • Enables bids for UHVAC/HVDC projects
  • Drives competition in transmission bidding
2 min read

Cabinet enhances equity investment limit of POWERGRID to Rs 7,500 crore per subsidiary

Cabinet approves raising POWERGRID's equity investment cap to Rs 7,500 crore per subsidiary to fund renewable energy and transmission projects.

"This ensures better price discovery, and ultimately leads to the availability of affordable and clean energy for consumers. - CCEA"

New Delhi, Feb 24

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Tuesday approved enhanced delegation to Power Grid Corporation of India Limited, enhancing the permissible equity investment limit of the company from the current threshold of Rs 5,000 crore per subsidiary to Rs 7,500 crore per subsidiary -- while retaining the existing cap of 15 per cent of the company's net worth.

The approval came under the extant guidelines dated February 4, 2010, of the Department of Public Enterprises (DPE) on the delegation of powers applicable to Maharatna CPSEs.

According to an official statement, the approval will enable POWERGRID, the largest and most experienced transmission service provider in the country, to expand its investment in its core business and support the evacuation of renewable energy capacity, helping achieve the target of 500 GW from non-fossil-based sources.

The statement further said that POWERGRID can now participate in the bids for capital-intensive transmission projects, such as Ultra High Voltage Alternating Current (UHVAC) and High Voltage Direct Current (HVDC) transmission networks.

Additionally, it will broaden competition in the Tariff-Based Competitive Bidding (TBCB) for the selection of bidders for critical transmission projects.

"This ensures better price discovery, and ultimately leads to the availability of affordable and clean energy for consumers," the CCEA said.

The POWERGRID, the central transmission utility, recently announced its unaudited financial results for the third quarter of this fiscal. The public sector company reported robust growth in profitability.

Standalone profit after tax (PAT) stood at Rs 4,160.17 crore -- a 6.8 per cent increase from Rs 3,894.09 crore in Q3 FY25. Standalone revenue from operations was Rs 11,005.28 crore, up year-on-year from Rs 10,120.72 crore.

The Board of Directors approved several significant proposals, including a second interim dividend of Rs 3.25 per equity share (32.5 per cent on the face value of Rs 10) for FY 2025-26. The dividend will be paid on February 27, 2026.

- IANS

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Reader Comments

S
Sarah B
Good to see the government empowering a Maharatna PSU. The financial results are strong, and this enhanced delegation shows trust in their management. Hopefully, this leads to more efficient project execution and ultimately, stable power supply for industries and homes.
R
Rohit P
While the intent is good, I hope this doesn't lead to over-leveraging or risky investments by subsidiaries. The cap of 15% of net worth is a sensible check, but oversight must remain strong. Public money is involved. The focus must stay on core transmission and green energy evacuation.
P
Priya S
Excellent news! As a shareholder, the robust PAT growth and the interim dividend are very welcome. This enhanced investment power should translate into long-term value creation. POWERGRID has a solid track record.
V
Vikram M
The key benefit is broadening competition in TBCB. More players (or stronger participation from POWERGRID) can lead to better price discovery. If this truly results in affordable clean energy for the common man, then it's a win. Let's see the execution on the ground.
M
Michael C
Investing in UHVAC and HVDC technology is forward-thinking. For a country of India's size and growing energy demands, a robust, modern transmission grid is as important as generation capacity. This is a strategic move for energy security.

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