Torrent Power witnessed a general decline in T&D losses in its power distribution business – both in licensed and franchised areas – during the first quarter of FY24.
According to a Torrent Power investor presentation filed on stock exchanges, the company enjoyed lower T&D losses in all its licensee areas, and two out of three franchised areas. As can be seen from the table below, the Agra franchise in Uttar Pradesh was the only area to have shown higher T&D losses in Q1 of FY24, as against those in Q1 of FY23.
In Dadra & Nagar Haveli and Daman & Diu (DNHDD), where Torrent Power is a distribution licensee, T&D losses fell to just 1.58 per cent in Q1 of FY24 from 2.23 per cent in Q1 of FY23. It should be noted that DNHDD represents an important component of Torrent Power’s distribution business. In Q1 of FY24, the DNHDD licensee area accounted for 30.8 per cent of the total electricity purchase by Torrent Power, across its entire distribution business, in Q1 of FY24. DNHDD comes next to only the Ahmedabad & Gandhinagar distribution licensee area.
The DNHDD area was formally taken over on April 1, 2022, through a newly-formed joint venture Dadra and Nagar Haveli and Daman and Diu Power Distribution Corporation Ltd, with Torrent Power holding 51 per cent and the remaining held by the UT administration.
In the Shil-Mumbra-Kalwa (SMK) franchisee area in Maharashtra, which was taken over in April 2020, T&D losses in Q1 of FY24 were lower at 32.58 per cent, from 37.97 per cent in Q1 of FY23. At the time of takeover, T&D losses in this area stood at an unruly 47 per cent.
Torrent Power expects to undertake capital expenditure of Rs.300 crore in the SMK area during the entire licence validity period (up to February 29, 2040). Of this Rs.150 crore will be invested in the first five years. Over the next 15 years, T&D losses in the SMK area are projected to come down to 12 per cent.
Torrent Power distributes nearly 28 billion units of electricity to over 4.03 million customers in the cities of Ahmedabad, Gandhinagar, Surat, Dahej SEZ and Dholera SIR in Gujarat, Union Territory of DNH & DD; Bhiwandi, Shil, Mumbra and Kalwa in Maharashtra; and Agra in Uttar Pradesh.
It may be noted that Dholera Special Investment Region (SIR) is not included in the above table as the SIR is still under development. Torrent Power’s electricity distribution business are therefore yet to begin.
Also read: Torrent Power Incorporates Two More Subsidiaries In “TU” Series
Transfer of RE business
In an independent development, Torrent Power Ltd has proposed to transfer its renewable energy (RE) business to a wholly-owned subsidiary Torrent Green Energy Pvt Ltd (TGEL), a wholly-owned subsidiary of Torrent Power. This scheme of arrangement, approved by the Torrent Power board on August 10, 2023, will be effective April 1, 2024. In FY23, the RE business of Torrent Power contributed Rs.338.06 crore (or 1.79 per cent) to the total revenue of Torrent Power. As of June 30, 2023, the RE business had a net worth of Rs.1,056.97 crore, representing 9.19 per cent of the company’s total net worth.
Featured photograph (source: Torrent Power) shows regularisation of electricity meters in the SMK franchisee area.
