PGCIL set to close FY25 with over 80 per cent growth in capex

Power Grid Corporation of India Ltd (PGCIL) has projected capital expenditure of Rs.23,000 crore in FY25, which would imply a growth of 84 per cent from the actual FY24 level of Rs.12,500 crore.

In the first three quarters (9M: April to December), PGCIL incurred capital expenditure of Rs.17,651 crore, suggesting that PGCIL was well on track to meet the projected FY25 figure.

Addressing an investor conference on February 5, 2025, R.K. Tyagi, CMD, PGCIL, said that up to January 31, 2025, PGCIL’s cumulative FY25 capex was Rs.19,480 crore providing credence to the possibility that the Central PSU could close FY25 with capex well exceeding the projected Rs.23,000 crore. Incidentally, PGCIL’s official capex target for FY25 stood at a modest Rs.15,000 crore.

PGCIL’s projected capex in FY25, at Rs.23,000 crore, would be the highest since FY19. In each of FY18 and FY19, PGCIL had incurred capital expenditure of over Rs.25,000 crore (see table). However, for the five-year period from FY20 to FY24, average annual capex has hovered around Rs.11,000 crore.

The PGCIL top official said that the company’s capex would maintain an upward trajectory in the coming years. For FY26, Tyagi projected capex to be in the region of Rs.35,000 crore, which could by far be the company’s highest historical annual capex, in nominal terms.

The capital expenditure (capex) figures being discussed here are “consolidated” in that they include those of PGCIL’s TBCB subsidiaries.

 

Work in hand

PGCIL’s rising capex is stemming from the growing value of projects in hand. As of January 31, 2025, PGCIL was pursuing projects worth Rs.1,43,749 crore with a clear dominance of TBCB projects (largely interstate) having a share of 65.2 per cent. Incidentally, Tyagi discussed a new win – a Rs.3,500-crore project in Karnataka – that came about on February 5, 2025. This has been discussed in a separate story.

As can be seen from the table, RTM projects, both existing and new, together represented around one-third of PGCIL’s work-in-hand as of January 31, 2025. New RTM projects, estimated at Rs.38,568 crore, are those where physical execution has yet to begin. This category includes the Rs.20,000-crore Ladakh HVDC scheme that will see major contracts awarded by PGCIL in Q1FY26.

The “Others” category includes projects outside PGCIL’s core activity of domestic power transmission, such as smart metering, solar power generation, cross-border transmission links, etc. On the smart metering front, R.K. Tyagi said that the company would explore more opportunities after gaining experience in Gujarat where PGCIL has been mandated the rollout of 67 lakh smart meters.

 

State-level projects

Regarding development of intrastate grids, PGCIL has a two-pronged approach – joint ventures with state governments and participation in intrastate schemes under the TBCB route. The PGCIL CMD noted that a joint venture with Rajasthan government has recently been formalized and projects are being identified. Once this process is completed, the JV – Rajasthan Power Grid Transmission Company Ltd – would start project execution, Tyagi noted.

PGCIL has a similar joint venture in Bihar – Bihar Grid Company Ltd – and more such JVs are being planned with states like Uttar Pradesh, Assam and Andhra Pradesh.

On the intrastate-TBCB front, the PGCIL top official said that the company would participate wherever it sees the opportunity. Currently, PGCIL is seen to be most active in Uttar Pradesh where it has four TBCB projects, including two commissioned. The Central PSU also has one operational TBCB asset in Madhya Pradesh.

Also read: PGCIL wins Rs.3,500-crore transmission project in Karnataka

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