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Cover Story | October 2018

Distribution companies with best profitability (private discom) - Tata Power

Tata Power, formerly known as Tata Electric, pioneered the generation of electricity in India more than 100 years ago. Today, it is the country's largest integrated power utility, established as a licensee in Mumbai, with ambitious expansion plans.Tata Power is constantly striving and proud to live to its founder's dream- to be able to provide cheap, abundant and uninterrupted power. Its key focus is to reach out to the larger population of the city with its competitive tariff and see this dream come true. The company takes immense pleasure in being associated with the residents of Mumbai as their preferred power supplier and are constantly trying to provide the city with an improved experience. <p></p> <p>A steady network expansion within the city with a focus on 11 clusters was approved by MERC. Its efforts in these areas are focused on expanding the company's reach and a strong distribution network connected to the homes of their satisfied consumers. Tata Power has a customer base of over 0.6 million direct customers in Mumbai and on an average, about 6,500 million units (MU) are sold in a year.</p> <p> <span style="font-weight: bold;">Delhi Distribution</span><br /> The company's partnership for distribution with the State Government of Delhi for its North Delhi customers, the Tata Power Delhi Distribution (TPDDL), is the only success story of privatisation in India. Tata Power-DDL is a joint venture between Tata Power and the Government of NCT of Delhi, with the majority stake being held by Tata Power Company (51 per cent). Tata Power-DDL distributes electricity in north and north-west parts of Delhi and serves a populace of 7 million. </p> <p>The company started its operations on July 1, 2002, post the unbundling of the erstwhile Delhi Vidyut Board (DVB). With a registered consumer base of 1.64 million and a peak load of around 1,967 MW (recorded in July 2018), the company's operations span across an area of 510 sq km.</p> <p><span style="font-weight: bold;">Distribution Franchise for Jamshedpur Circle</span><br /> Subsequent to winning the bid for the Distribution Franchisee (DF) of Jamshedpur circle, a Special Purpose Company (SPC) TP Power Distribution was formed and executed the Distribution Franchise Agreement (DFA) with Jharkhand State Electricity Board (JSEB).</p> <p> <span style="font-weight: bold;">Ajmer Distribution</span><br /> Tata Power DDL has signed a Distribution Franchisee Agreement (DFA) with Ajmer Vidyut Vitran Nigam (AVVNL) to cater to the power requirements of the customers in Ajmer. On the financial front, the company posted a consolidated PAT of Rs 24.77 billion. Even after adjusting for the extraordinary income of Rs 11.02 billion, it stands as one of the highest profit making companies in the distribution segment. </p> <p><span style="font-weight: bold;">Key Operational Highlights in FY18</span><br /> - Underlying Business EBITDA crosses Rs 100 billion.<br /> - Renewable portfolio capacity is 2,272 MW and an EBITDA of Rs 18.27 billion.<br /> - Average coal prices were up 25 per cent as compared to last year, coal companies delivered higher profit of Rs 7.51 billion which has compensated for an increased PAT loss at CGPL due to higher coal prices.<br /> - Deleveraging on track by the way of divestment of the non-core investments- sale of investment in Tata Communications and Defence division for a total consideration of Rs 43 billion already announced.<br /> - Refinancing of existing loans at better terms resulted into a significant savings on interest cost. Average borrowing cost lowered by 45 basis point.<br /> - Net debtor equity improved from 3.09 to 2.48.</p>
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17 Oct 2016
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