Power Grid Corporation of India Ltd (PGCIL) has recorded a modest year-on-year growth in capital expenditure during FY23, at the consolidated level, while capitalization has declined significantly.
According to an investor presentation filed on stock exchanges, PGCIL incurred capital expenditure (CAPEX) of Rs.9,212 crore in FY23, just 1.7 percent higher than the comparable Rs.9,060 crore in FY22. Consolidated capex in FY23 also exceeded the target of Rs.8,800 crore by around 3 percent.
This capex is at the consolidated level, which means that it includes capex undertaken by PGCIL on a standalone basis (RTM projects), as well as that undertaken by its wholly-owned subsidiaries for TBCB projects.
At the standalone level, PGCIL’s capex rose by a much sharper 18.5 percent – from Rs.4,432 crore in FY22 to Rs.5,252 crore in FY23. However, capex on TBCB projects declined by over 14 percent in FY23.
It is also interesting to note that over 40 percent of PGCIL’s consolidated capex in FY23 was incurred during the fourth quarter (Q4: January to March) of the financial year.
Capex plans
For FY24, PGCIL has estimated to incur capital expenditure of Rs.8,800 crore, at the consolidated level. This would include around Rs.5,000 crore on a standalone basis (RTM projects) and roughly Rs.3,800 crore on TBCB projects. Addressing an investor conference, PGCIL CMD, K. Sreekant, expressed confidence that the capex target for FY24 will be surpassed.
Incidentally, during FY23, PGCIL acquired as many as 12 interstate schemes and one intrastate project under the TBCB modality. The aggregate project outlay of these schemes is around Rs.11,000 crore.
Also read: PGCIL Targets Capitalization Of Over Rs.10,000 Crore In FY23
Capitalization
PGCIL’s capitalization in FY23 stood at Rs.7,413 crore at the consolidated level. Capitalization broadly refers to the creation of operational assets. It measures the extent of projects (capital expenditure) that has been commissioned and hence converted into operational assets.
As can be seen from the table, PGCIL’s consolidated capitalization averaged at around Rs.20,000 crore during the period FY20 to FY22, falling sharply to Rs.7,413 crore in FY23. One of the possible reasons for low capitalization in FY23 could be PGCIL’s inability to initiate physical work on several TBCB projects in Rajasthan, owing to uncertainty over the Great Indian Bustard (GIB) imbroglio. To give a rough estimate, PGCIL completed around Rs.3,000 crore of TBCB projects in FY23 as against over Rs.5,500 crore in FY22.
In physical terms, PGCIL, in FY23, added 2,972 ckm of new transmission lines and commissioned nine substations with an aggregate transformation capacity of 28,990 MVA. This includes both RTM and TBCB projects.
Speaking only of TBCB projects, PGCIL in FY23 commissioned two interstate schemes – Powergrid Medinipur-Jeerat Transmission Ltd and Powergrid Bhuj Transmission Ltd – as well as two intrastate schemes housed under Powergrid Rampur Sambhal Transmission Ltd (in Uttar Pradesh) and Powergrid Bhind Guna Transmission Ltd (in Madhya Pradesh).
