Power Grid Corp is ready to separate its telecom business into a subsidiary by June 2023. The new subsidiary will target a revenue of INR 1,000 crore in FY24.
May 24, 2023
Power Grid Corp will separate its telecom business into a subsidiary by June 2023. The public company will monetize its transmission assets through securitization. The new subsidiary will target a revenue worth INR 1,000 crore by FY24.
In FY23, the business’s reported revenue was INR 916 crore, while EBIT was INR 548 crore.
Expecting strong growth prospects for the business this year, Power Grid recently approved INR 259 crore capex to augment the present telecom access network. Currently, Power Grid has over 82,000 kilometers of OFC and optical ground wire network across India.
The company is exploring data centers as a significant business stream and recently got approval to set up one from the Central Electricity Regulatory Commission (CERC). A 1,000-rack data center is already being built in Mansar, and an edge data center and hyper-scale data center are in the works.
Power Grid has set InvIT to monetize its transmission projects. However, to set up the telecom subsidiary securitization of cashflows will be used to raise funds. It plans to cover last year’s target of raising INR 6,800 crore through monetization, which could not happen due to a rise in interest rates and a decrease in asset valuation. Hence, the company explores a securitization route this year.