Delhi power distributors to alter equity structure

Power distribution companies in the Capital like BSES Yamuna, BSES Rajdhani and New Delhi Power Ltd may see a change in their equity structure with the Planning Commission's directive for reduction in their losses.

In a meeting held last week, the Delhi government was asked by the apex Plan panel to rework the equity base of the power distribution companies to prevent losses.

"Delhi Chief Minister Sheila Dixit has asked officials to work out a plan with the commission on this matter," an official told Business Standard. It was also observed that investment was needed to bring down the mounting losses.

BSES Yamuna started with an equity base of Rs 116 crore, BSES Rajdhani with Rs 460 crore while NDPL started with an equity base of Rs 385 crore. State officials will shortly be meeting adviser to Deputy Chairman Planning Commission Gajendra Haldea and adviser, Planning Commission, Surya Sethi, among others, to work out a plan.

Among the alternatives that have been suggested are revaluing the assets of the distribution companies, introducing premium for reducing pilferage or injecting fresh equity. "There is an immediate need to restructure the companies to keep them viable. If restructuring is not done then there is an investment crisis in the offing," the official added.

"As far as the lenders are concerned low equity base is a cause of concern for an increase in loans for capital expenditure," sources said.

There is a need to increase equity.

BSES Yamuna is a a real cause for concern as its aggregate technical and commercial (AT&C) losses are the highest and the equity base the lowest when compared with the areas under other companies," industry sources said.

While debt to equity ratio of BSES Rajdhani is Rs 700 crore to Rs 460 crore, it is Rs 174 crore to Rs 116 crore for BSES Yamuna.

"Capital expenditure has been curtailed in the case of BSES Yamuna. If it had more equity it would have performed better," sources said. In fact a representation was made to the Delhi government some time back to increase the equity base of the discoms.

When contacted, NDPL Managing Director Anil Kumar Sardana said, "Our original equity is intact. We have earned returns on our equity every year. We have absolutely no issue as of now for injecting any fresh equity and our balance sheet is absolutely healthy."