Analysis of the 14th Annual Integrated Rating and Ranking of Power Distribution Utilities (FY 2024-25)

Introduction to the 14th Integrated Rating Exercise

The 14th Integrated Rating Exercise provides an evaluation of power distribution utilities under a framework approved by the Ministry of Power (MoP). This report serves as a benchmark for financial and operational performance across the sector. Power Finance Corporation (PFC) acted as the nodal agency for the exercise, supported by Deloitte Touche Tohmatsu India LLP as the consulting agency.

The scope of the 14th edition included the rating of 65 utilities out of a total of 72 entities. The rated group comprises 42 state-owned DISCOMs, 12 private DISCOMs, and 11 Power Departments. Seven utilities were not rated during this cycle:

• CESC (Kolkata), DNHDDPDCL, and CPDL (Chandigarh): These entities did not participate in the rating exercise.
• Lakshadweep Power Department: Audited accounts were not received for this utility.
• JPDCL and KPDCL: The financial statements were determined to be non-representative of the financial condition of the DISCOMs given the nature of the transactions.
• Tata Power Mumbai Ltd.: Segregated accounts for the distribution business were not submitted.

National Operational Performance: Losses and Efficiency

Operational data for FY 2024-25 indicates a trend of improvement across key performance indicators. National AT&C losses were reduced from 15.97% in FY24 to 15.04% in FY25. During this period, 38 utilities—comprising 33 DISCOMs and 5 Power Departments—recorded AT&C losses below the 15% threshold.

Operational Metric Comparison (FY24 vs FY25)

Data indicates that 21 utilities achieved a billing efficiency at or above the upper scoring threshold (92% for DISCOMs and 90% for Power Departments). Furthermore, 17 utilities achieved 100% collection efficiency during FY25.

Financial Recovery and Cost Realization

Financial metrics are evaluated based on the ACS-ARR Gap, which measures the difference between the Average Cost of Supply (ACS) and the Average Revenue Realization (ARR). A lower or negative gap indicates better cost recovery and financial sustainability.

• Profit After Tax (PAT): The aggregate performance of rated utilities shifted from a loss of INR 27,022 Crores in FY24 to a positive PAT of INR 2,701 Crores in FY25.
• ACS-ARR Gap (Cash Adjusted): The gap narrowed from INR 0.32/kWh in FY24 to INR 0.07/kWh in FY25.
• ACS-ARR Gap (Tariff Subsidy Received Basis): This metric, which excludes regulatory income and UDAY grants, recorded a reduction from INR 0.20/kWh in FY24 to INR 0.06/kWh in FY25.
• Subsidy Realization: The national realization rate increased from 97.45% in FY24 to 98.90% in FY25.

Liquidity and Payment Discipline Metrics

Metrics for receivables and payables show improved payment discipline and cash flow management across the rated entities.

• Days Receivable: The national average improved from 113 days in FY24 to 112 days in FY25.
• DISCOMs Achieving ≤60 Days Receivable: 26 utilities achieved full marks for this parameter. Grouped by region/state, they include:
  • Gujarat: UGVCL, MGVCL, DGVCL, PGVCL
  • Rajasthan: JVVNL, JdVVNL, AVVNL
  • Odisha: TPNODL, TPCODL, TPWODL
  • Delhi: TPDDL, BRPL, BYPL
  • Private Utilities: Torrent Power (Ahmedabad and Surat), AEML, NPCL
  • Other States: APDCL (Assam), UHBVNL (Haryana), WBSEDCL (West Bengal), APCPDCL (Andhra Pradesh), KSEBL (Kerala), UPCL (Uttarakhand), HPSEBL (Himachal Pradesh), TNPDCL (Tamil Nadu), and BESCOM (Karnataka).
• Days Payable to GENCOs/TRANSCOs: The national average improved from 132 days in FY24 to 113 days in FY25.

Utilities Achieving ≤60 Days for Payables: Torrent Power (Ahmedabad and Surat), AEML, TPDDL, NPCL, UGVCL, MGVCL, DGVCL, PGVCL, TPNODL, TPCODL, TPSODL, PSPCL, PVVNL, UHBVNL, DHBVNL, MPPaKVVCL, JVVNL, JdVVNL, and AVVNL.

Grading Distribution and Rating Movements

The 14th Integrated Rating Exercise resulted in 31 utilities being assigned grades of A+ or A, while 11 utilities were assigned grades of C or C-.

• Upgrades: 22 utilities recorded an improvement in their grades, including 18 DISCOMs and 4 Power Departments.
• Downgrades: 10 utilities saw a decline in their grades, including 9 DISCOMs and 1 Power Department.
• Top Performers: Torrent Power Ahmedabad and Torrent Power Surat both achieved the maximum score of 100. AEML recorded a score of 99.75.
• Specific State Movements:
  • Andhra Pradesh: APCPDCL and APSPDCL both moved from C to B.
  • Punjab: PSPCL moved from A to A+.
  • Uttar Pradesh: PVVNL moved from B to A+.
  • Haryana: DHBVNL and UHBVNL both moved from A+ to A.

Regulatory Environment Highlights

The report identified several key characteristics of the current regulatory landscape:

• Tariff Orders: Timely tariff orders for the FY26 period were issued in 23 states/UTs.
• True-up Orders: FY24 true-up orders have been issued for 52 of the 65 rated utilities.
• Fuel Cost Pass-through: 30 state regulators have implemented mechanisms for the automatic pass-through of fuel costs, allowing for the timely recovery of power purchase cost fluctuations.

Utility-Specific Key Findings: APCPDCL

Andhra Pradesh Central Power Distribution Corporation Limited (APCPDCL) recorded a rating movement from C to B. While the utility’s base rating score was 82.53, its final grade was limited by a “Red Card Metric.”

The Red Card for an “Auditor’s Adverse Opinion” carries a non-capped disincentive of -15.00 points. Per the rating methodology, a Red Card renders a utility ineligible for A+ or A grades regardless of the base score achieved.

APCPDCL Performance Metrics Comparison (FY23 vs FY25)