Tata Power to bid for UP discoms in core biz push

Time of India

14-05-2025

Mumbai: Tata Power plans to bid for two electricity distribution companies in Uttar Pradesh — Dakshinanchal Vidyut Vitran Nigam and Purvanchal Vidyut Vitran Nigam — once tender documents are released, said MD Praveer Sinha.
This move supports Tata Power's goal to grow its transmission and distribution (T&D) business, which brings in most of its revenue and a large share of its profits.
'Based on our discussions, bid documents are being finalised and are expected by the end of the month. They (UP) are looking to privatise two discoms — Dakshinanchal and Purvanchal — which will be divided into six circles. We will participate actively when the documents are available,' Sinha said.
Currently, Tata Power manages electricity distribution in Mumbai, Delhi, Ajmer, and Odisha, serving 12.5 million customers. It aims to have a base of 40 million in fiveyears. UP's goal is to cut losses and improve efficiency in the two discoms. Most likely, govt will choose a public-private partnership, with private companies holding majority stake.
Dakshinanchal and Purvanchal serve 42 of UP's 75 districts. Tata Power improved the financial health of the discoms after it checked into them, which also positions it to capitalise on opportunities arising in the power distribution space.
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For instance, the profit of the Odisha discom, in which it holds 51% and the Odisha govt owns 49%, increased by 86%, reaching Rs 439 crore in FY25 from Rs 236 crore in FY22. Odisha discom came under Tata Power's management between June 2020 and April 2021.
Tata Power, which plans to enter the small modular nuclear reactor business, is waiting for legal clarity before moving ahead. 'We are awaiting amendments to the Nuclear Power Act — specifically civil liability and private sector participation.
We expect the amendments to be discussed during the monsoon session. We are preparing with site evaluations, water arrangements, and technology reviews, but our next steps depend on legal clarity,' Sinha said.
Tata Steel & Tata Motors, are potential customers for the nuclear power that Tata Power intends to offer as part of its clean energy solution.
It plans to spend Rs 25,000 crore on capital expenditure in FY26. Sinha said 50% of this amount will be allocated to renewables, 20% to generation, and 30% to T&D.
In FY25, it spent Rs 16,000 crore on capex, falling short of the Rs 20,000-crore target. The reduced spend was attributed to delays in transmission and renewable projects, according to the leadership.
Tata Power plans to exit Tata Projects, the contractor that built Parliament building after independence, as it wants to focus on its main businesses. It did not participate in the recent rights issue of Tata Projects, causing its ownership share to decline to 23% from 31%. The other shareholders of Tata Projects are Tata Sons (owns more than 50%) and Tata Chemicals. 'Tata Power is focused on growth in core businesses: renewables, hydro, transmission, and distribution.
We need capital for this, so we have chosen not to allocate funds to non-core ventures,' said Sinha , adding that 'We have been divesting non-core and overseas assets and will continue to do so.'
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