Power Grid Corporation of India Ltd (PGCIL) closed FY25 with consolidated capital expenditure (capex) of over Rs.26,000 crore, which was the highest in recent history.
PGCIL’s consolidated capex stood at Rs.26,255 crore in FY25, more than twice the level of Rs.12,500 crore recorded in FY24.
“Consolidated” capex refers to that incurred by PGCIL on standalone basis as well as that of its subsidiaries.
For FY25, PGCIL had set a modest official capex target of Rs.15,000 crore. However, after the Q3FY25 results, PGCIL CMD R.K. Tyagi had indicated that consolidated capex for the full year FY25 would exceed Rs.23,000 crore, which has now materialized.
What has boosted PGCIL’s capex in FY25 was the Central PSU’s stellar performance in the ISTS-TBCB space. In FY25, PGCIL won as many as 26 out of the 45 ISTS-TBCB schemes formally transferred to winning developers. PGCIL’s market share stood at an invincible 53.4 per cent, in terms of annual transmission charges (tariff). This has been analyzed in much detail in “T&D India ISTS-TBCB Report FY25.”
As can be seen in the table alongside, PGCIL’s highest capex, prior to FY25, was in FY19 when it had touched Rs.25,807 crore. Between FY20 and FY24, there was a perceptible drop in capex with the five-year annual average standing at just over Rs.11,000 crore.
Falters on capitalization
The rise in capex notwithstanding, PGCIL faltered on the capitalization front. Capitalization refers to that amount of capex translating into commercially operational assets. Broadly, it reflects the rate of commissioning of projects. PGCIL’s FY25 target of consolidated capitalization was Rs.18,000 crore against which the actual achievement was just Rs.9,104 crore.
At the end of the nine months of FY25 (April to December), PGCIL’s consolidated capex was Rs.7,423 crore. In this address to investors then, PGCIL CMD R.K. Tyagi had expressed optimism that the Rs.18,000-crore capitalization target would be met, given a substantial pipeline of projects nearing completion. However, PGCIL could achieve capitalization of just Rs.1,591 crore in Q4FY25, which, ironically, was the lowest level in the past eight quarters.
When compared with FY24, PGCIL’s consolidated capitalization in FY25 was around 18.3 per cent higher.
It is likely that the capitalization that PGCIL could not achieve in Q4FY25 would be fulfilled in the first quarter (Q1: April-June) of current fiscal year FY26.
Major projects commissioned
In FY25, PGCIL commissioned a series of projects that included important 765/400kV substations like Sikar-II (Rajasthan), Kurnool-II (Andhra Pradesh) and Navsari (Gujarat). A number of 765kV double-circuit lines, all relating to evacuation of renewable energy, were also put into commercial operations in FY25. These included: Fatehgarh-II – Bhadla-II; Bhadla-II – Sikar-II; Sikar-II – Aligarh; Kurnool-III PS – Kurnool (New). PGCIL also commissioned a respectable number of 400/220kV substations and 400kV lines during FY25.
Featured photograph shows PGCIL’s first interconnecting transformer (ICT) retro-filled with natural ester oil, in FY25. This 132/33kV, 10 MVA ICT is part of the HVDC Pusauli substation in Bihar. Before this, PGCIL had completed retro-filling with natural ester oil in two shunt reactors – Maithon (Jharkhand) and Aizawl (Mizoram) — but this is the first time that an ICT has been so retro-filled. (Photo: PGCIL)
