REGULATORY · MARKET STRUCTURE · INDIA
India raises Power Grid subsidiary equity investment ceiling
Change
India’s Cabinet Committee on Economic Affairs approved raising Power Grid Corporation’s per-subsidiary equity investment limit to ₹7,500 crore from ₹5,000 crore, while keeping the overall cap at 15% of the company’s net worth.
Why it matters
The CCEA decision increases the delegated per-subsidiary equity investment ceiling for Power Grid subsidiaries/JVs to ₹7,500 crore from ₹5,000 crore, while retaining the 15% of net worth cap (Power Grid net worth cited at ₹92,216 crore; 15% equals ₹13,832 crore). The prior ₹5,000 crore ceiling was identified by the government as a limiting factor for Power Grid’s participation in high-value tariff-based competitive bidding projects. The change expands the company’s ability to fund larger-capacity transmission builds through its arms, aligning with the stated need to add large-capacity projects and support renewable energy evacuation. The decision lands amid a projected ₹9.2 lakh crore transmission investment requirement by 2032, increasing the near-term relevance of capital allocation and project structuring choices for grid expansion.
Implications
- • Higher per-subsidiary equity capacity for Power Grid arms (₹7,500cr vs ₹5,000cr).
- • Constraint on bidding/participation in high-value TBCB projects is reduced.
- • More internal headroom to finance large transmission corridors for RE evacuation.
- • Capital allocation across subsidiaries becomes less limited by the prior per-unit ceiling.
Who is affected
- • Power Grid Corporation of India and its subsidiaries/joint ventures
- • Developers and bidders in tariff-based competitive bidding (TBCB) transmission projects
- • Renewable energy generators reliant on transmission evacuation capacity
- • Transmission EPC contractors and equipment suppliers tied to large corridor builds
Source
Topics
World & Politics Policy & Regulation Energy & Power Grid & Utilities Energy Transition