Eleven of the 63 utilities surveyed have earned the highest grade of “A+” in the “13th Annual Integrated Rating & Ranking: Power Distribution Utilities” exercise conducted for the year FY24 by Power Finance Corporation, on behalf of the Union power ministry.
A total of 63 utilities comprising 44 state discoms, 10 private discoms and 11 power departments participated in the survey. The ratings and rankings were with respect to financial and operational performance during FY24 (April 1, 2023 to March 31, 2024).
The 11 utilities that received the highest possible grade of A+ include six state-owned and five private discoms. The top ten utilities are shown in the given table.
The grade of “A+” implies “exceptionally strong financial and operational performance.” This grade has been assigned to utilities having a score exceeding 85 (on a scale of 0 to 100). The score, in turn, has been arrived as a composite metric of specific indicators based on three broad parameters – financial stability (weight: 75 per cent), performance excellence (13 per cent) and external environment (12 per cent).
A total of 15 discoms and six power departments saw improvement in their grades in the 13th Report vis-à-vis the 12th Report (based on FY23 performance). On the other hand, 13 discoms saw their grade worsening, by the same comparison.
The number of discoms receiving very poor grades (C, C- or D) reduced from 21 in the 12th Report to 18 in the 13th Report
The key findings in the 13th Report are:
- Billing efficiency increased marginally from 86.8 per cent in FY23 to 86.9 per cent in FY24
- Collection efficiency dropped by 1.2 percentage points (120 basis points or bps) to 96.4 per cent
- ACS-ARR gap decreased by 20 paise per kwh (unit) from Rs.0.59 per kwh in FY23 to Rs.0.39 per kwh in FY24, thereby reducing the absolute cash gap to around Rs.58,000 crore (ACS: Average cost of supply, ARR = Average revenue realized)
- Days receivable improved to 115 days in FY24 from 118 days in FY23
- Days payable to gencos and transcos increased to 132 days in FY24 to 130 days in FY23
(#4 and #5 above are indicative of improvement in financial management)
Top utilities
Adani Electricity Mumbai Ltd (AEML) retained its top rank in FY24, although its score dropped marginally to 99.8 from a near-perfect 99.9 in FY23
State utility Dakshin Gujarat Vij Company Ltd (DGVCL) saw an improvement in its rank from No.4 in FY23 to No.2 in FY24.
Private utility Noida Power Company Ltd ranked No.3 in FY24, up from No.7 in FY23
Tata Power Group saw three of its four Odisha discoms feature in the list of top ten utilities in FY24
Utilities excluded
Out of the total 72 power distribution utilities in the country, the study included 63 utilities. Among private utilities, those that did not participate in the ratings exercise included CESC Ltd, Tata Power (Mumbai), Torrent Power (Surat), Torrent Power (Ahmedabad) and DNH&DDPCL (a Torrent Power joint venture). It may be noted that only those utilities that have completed three full years of operation are included in the study. It is for this reason that TP Northern Odisha Distribution Ltd (TPNODL) that ranked 9th in the FY24 ranking was not part of the FY23 exercise. It is interesting to note that that Torrent Power (Surat) and Torrent Power (Ahmedabad) that did not participate in the FY24 ratings exercise were ranked No.2 and No.3, respectively, in the FY23 ranking. This could have provided scope for some utilities to improve their ranking, as seen in the case of Nodia Power Company Ltd (Rank No.3 in FY24 vs Rank No.7 in FY23).
Featured photograph is for representation only
