Mumbai, February 19 Maharashtra State Electricity Distribution Company plans to complete the separation of its agricultural arm by April, a key step ahead of its planned initial public offering for December, a top official has said.
"We are targeting an IPO for MSEDCL (Maharashtra State Electricity Distribution Company) by December, and before that, we will separate our agricultural business, which we aim to complete by April," its Chairman and Managing Director Lokesh Chandra told
The agricultural segment will be established as a separate company, not a subsidiary, ensuring that its liabilities do not remain on the balance sheet of the core distribution utility, Chandra said.
MSEDCL has a total outstanding debt of approximately Rs 96,000 crore, of which nearly Rs 76,000 crore relates to unpaid agricultural consumption, he said.
The accumulation of these arrears has led to higher working capital borrowings and financial strain, despite the core distribution business being operationally viable, Chandra added.
Following the separation in April, the remaining entity will retain a debt of approximately Rs 20,000 crore, which the company considers sustainable, he added.
Following the separation, the company will undertake a balance sheet clean-up and debt restructuring before launching the IPO process. The listing is targeted for completion by December this year, Chandra said.
The government is planning to dilute up to 10 per cent stake in the company through the IPO, he said, adding that the proceeds from the IPO are likely to be used for capital expenditure in transmission and distribution infrastructure.
Maharashtra Chief Minister Devendra Fadnavis had announced that the state's intent to list the energy utilities, including MSEDCL and also the generation and transmission arms, in December 2025. He hinted that the process will start with the listing of the transmission company in 2026.
Chandra said that discussions with the state government are underway to address agricultural-related arrears. Once resolved, the restructuring is expected to strengthen financial metrics and improve valuation prospects at the time of listing.
The company expects to save nearly Rs 66,000 crore in power procurement costs over the next five years through a strategic shift towards renewable energy backed by optimal storage planning.
The utility has redesigned its resource adequacy and power procurement plan to raise the share of renewables from around 15 per cent currently to 52 per cent, while carefully balancing solar, wind and storage capacities, he said.