PGCIL likely to see Rs.3-trillion capex by FY32

Power Grid Corporation of India Ltd (PGCIL) is likely to see aggregate capital expenditure (capex) of over Rs.3 trillion between now and FY32, according to R.K. Tyagi, CMD, PGCIL.

Addressing a recent investor conference related to PGCIL’s Q2FY25 performance, Tyagi explained that currently Rs.84,000 crore worth of power transmission projects were under bidding. Further, the National Electricity Plan (NEP) has estimated to Rs.3 lakh crore worth of projects are in the planning stage and are yet to enter the bidding stage. These projects are scheduled to commission by end-FY32. This gives a potential bidding pipeline of Rs.3,84,000 crore (or Rs.3.84 trillion).

Estimating PGCIL’s bid-success ratio to be 50 per cent, Tyagi expected that Rs.1,92,000 crore (or Rs.1.92 trillion) worth of these projects could be won by PGCIL.

Besides, as of November 7, 2024, PGCIL had works-in-hand of Rs.1,43,295 crore (or Rs.1.43 trillion). Adding this to the potential wins of Rs.1.92 trillion, PGCIL is estimated to see capital expenditure of around Rs.3.35 trillion between now and FY32.

 

Capex in FY25

For the ongoing fiscal year FY25, PGCIL has a capex target of Rs.18,000 crore. However, this target would be surpassed and the Central PSU is expected to close FY25 with a capex level of over Rs.20,000 crore, R.K. Tyagi projected.

In H1 (April to September), PGCIL undertook capex of Rs.10,002 crore, at the “consolidated” level. This means capex incurred by PGCIL (standalone) as well as that of its subsidiaries. Broadly speaking, “standalone” projects are those that come directly on PGCIL’s balance sheet; these are typically projects implemented by PGCIL on the regulated tariff mechanism (RTM) route. Projects implemented under the tariff-based competitive bidding (TBCB) mode, are implemented by project-specific subsidiaries of PGCIL. This capex, along with the “standalone” capex gives the “consolidated” figure. (See table).

Over 70 per cent (or Rs.12,816 crore) of PGCIL’s targeted capex of Rs.18,000 crore would be coming through TBCB projects, Tyagi noted. Another Rs.4,084 crore (or 23 per cent) would be in the form of RTM projects.

In FY24, PGCIL consolidated capex was Rs.12,500 crore, up from Rs.9,212 crore in FY23 and Rs.9,060 crore in FY22. According to information available with T&D India, PGCIL’s highest annual capex in recent history was Rs.15,313 crore, seen in FY20.

In H1FY25, PGCIL saw capitalization of Rs.4,006 crore at the consolidated level. Capitalization refers to that portion of capital expenditure getting converted into commercially operational assets. In Q2FY25, consolidated capitalization stood at Rs.1,686 crore, largely driven by the commissioning of 405 ckm of transmission lines and 8,515 MVA of transformation (substation) capacity.

 

Works-in-hand

As of November 7, 2024, PGCIL had an estimated work-in-hand of Rs.1,43,295 crore, out of which nearly two-thirds (or Rs.93,072 crore) were accounted for by ongoing TBCB projects. Ongoing RTM projects had a share of 6.2 per cent (or Rs.8,896 crore) while new RTM projects represented 26.5 per cent, valued at Rs.38,008 crore. New RTM projects are those RTM projects on which physical work has yet to begin. Important projects in this category include the Leh-Kaithal HVDC scheme and the evacuation schemes relating to wind farms offshore Tamil Nadu and Gujarat.

Also read: PGCIL set to win mega HVDC scheme in TBCB mode

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