Power Grid Corporation of India Ltd (PGCIL) has completed the first phase of rationalization of its wholly-owned subsidiaries associated with transmission schemes awarded under tariff-based competitive bidding (TBCB) mode.
Based on official information available, effective March 1, 2026, PGCIL has merged 17 TBCB subsidiaries into two others — Powergrid Khavda II-C Transmission Ltd and Powergrid Vataman Transmission Ltd.
While 12 subsidiaries have been merged with the former, five subsidiaries have been merged into Powergrid Vataman, as per the following:
Subsidiaries merged with Powergrid Khavda II-C Transmission Ltd
- Powergrid Khavda II-B Transmission Ltd
- Powergrid Khavda RE Transmission System Ltd
- Powergrid KPS2 Transmission System Ltd
- Powergrid KPS3 Transmission Ltd
- Powergrid ERWR Power Transmission Ltd
- Powergrid Raipur Pool Dhamtari Transmission Ltd
- Powergrid Dharamjaigarh Transmission Ltd
- Powergrid Bhadla Sikar Transmission Ltd
- Powergrid Ananthpuram Kurnool Transmission Ltd
- Powergrid Koppal Gadag Transmission Ltd
- Powergrid Neemrana Bareilly Transmission Ltd
- Powergrid Bidar Transmission Ltd
Subsidiaries merged with Powergrid Vataman Transmission Ltd
- Powergrid Bhadla III Transmission Ltd
- Powergrid Ramgarh II Transmission Ltd
- Powergrid Beawar Dausa Transmission Ltd
- Powergrid Bikaner Neemrana Transmission Ltd
- Powergrid Sikar Khetri Transmission Ltd
With this, the number of TBCB subsidiaries of PGCIL, corresponding to both interstate and intrastate schemes, has reduced to from 81 – the number before the restructuring – to 64, as of March 1, 2026.
Second phase of merger
In the second phase of the same exercise, PGCIL plans to merge as many as 28 TBCB subsidiaries into two others – Powergrid Ghiror Transmission Ltd and Powergrid South Olpad Transmission Ltd. Details of the 28 subsidiaries are not yet available.
Rationale
The only reason for consolidating TBCB subsidiaries is to achieve administrative efficiency. The exercise has no financial implications whatsoever. In the TBCB framework, every TBCB project – either interstate or intrastate – is housed under a project special purpose vehicle (SPV) that is originally incorporated by the bid process coordinator as its wholly-owned subsidiary. This SPV is then transferred to the winning developer selected under the TBCB guidelines.
Since each SPV is a company by itself, it has to be compliant with all provisions of the Companies Act, 2013, and other regulatory provisions applicable. There is therefore a significant “administrative overhead” that is now being eased out by this restructuring/merging exercise.
All the project-related authorization held by the TBCB subsidiary, such as the transmission licence issued by CERC, transmission service agreement, etc, will now be transferred to the acquiring entity (also referred to as the “surviving entity”).
Equity limit in subsidiaries
PGCIL has chosen the subsidiaries to be merged so that they form a cohesive group. For instance, all subsidiaries merged with Powergrid Vataman Transmission Ltd relate to projects based in north India (Rajasthan).
The merger is also governed by the equity capital limit of wholly-owned subsidiaries of Central public sector units (CPSUs), set by the Department of Investment & Public Asset Management (DIPAM), under the Union finance ministry.
It is learnt that PGCIL is engaging with DIPAM for raising this equity limit, enabling it to merge more subsidiaries, thereby achieving higher administrative efficiency and control.
In normal course, such mergers need to be first approved by the PGCIL board. The merger proposal is then sent to the Union power ministry, which, in turn, forwards it to DIPAM. Alongside, approvals are also sought from other authorities like CERC, Ministry of Corporate Affairs, etc.