Chandigarh: Punjab State Power Corporation Limited (PSPCL) has initiated plans to raise nearly ₹10,000 crore from the market without a Punjab government guarantee, signalling growing financial stress at the state-owned power utility.
The corporation has invited online bids from SEBI-registered Category-I merchant bankers to appoint a transaction adviser-cum-merchant banker for raising funds through non-convertible debentures (NCDs) and bonds.
The move comes despite the utility having previously maintained that its financial position was stable. PSPCL has also recently submitted its revised Annual Revenue Requirement (ARR) proposal to the Punjab State Electricity Regulatory Commission (PSERC).
According to PSPCL officials, the corporation is yet to receive around ₹7,000 crore in pending electricity subsidy payments from the Punjab government, including dues from the previous and current financial years. In addition, various state government departments reportedly owe about ₹2,600 crore in unpaid electricity bills.
Officials said the utility has also incurred higher expenditure after purchasing costly power from the market to meet peak summer demand.
Power sector experts said borrowing without a state government guarantee could require PSPCL to offer its assets as security, potentially increasing borrowing costs and merchant banker commissions.
The proposed borrowing has also raised questions over why the utility is seeking to shoulder the liability on its own if the state government is unwilling to provide a guarantee for the bond issue.
The planned fundraising is being viewed as an indication of the financial challenges facing PSPCL as it seeks additional resources to meet its operational and funding requirements.
