Tata Power Completes Acquisition of 51% Stake in Odisha DISCOMs

The company will have a 51% stake in the two DISCOMs and GRIDCO will own 49%


Tata Power has announced its takeover of Western Electricity Supply Company of Odisha (WESCO) and Southern Electricity Supply Company Of Orissa (SOUTHCO).

From now on, WESCO and SOUTHCO will operate under Tata Power Western Odisha Distribution Limited (TPWODL) and Tata Power Southern Odisha Distribution Limited (TPSODL), respectively.

In December 2019, Tata Power was awarded the Letter of Intent by the Odisha Electricity Regulatory Commission (OERC) to distribute and supply electricity in Odisha’s five circles that constitute the Central Electricity Supply of Odisha.

According to the OERC order, Tata Power holds 51% of the equity with management control. The State-owned Grid Corporation of Odisha (GRIDCO) will have the remaining 49% equity stake in the two distribution companies.

TPWODL will be responsible for the distribution and retail supply of electricity in five circles of WESCO, covering 2 million consumers with annual input energy of 7,520 MUs, in Rourkela, Burla, Bhawanipatna, Bolangir, and Bargargh.

TPSODL will be responsible for the distribution covering 2.3 million consumers with an average energy input of 3,470 MUs and a retail supply of electricity in six circles of SOUTHCO in Ganjam City, Berhampur, Aksa, Bhanjannagar, Jeypore, and Rayagada.

The company will manage a network of more than 100,000 circuit kilometers each for a license period of 25 years. With the inclusion of two additional distribution utilities, Tata Power expands its consumer base to 9.5 million from 5.2 million across Mumbai, New Delhi, Central part of Odisha, and Ajmer.

Praveer Sinha, CEO, and MD, of Tata Power, said, “It is a proud moment for us as we have ushered in the new year by commencing operations in WESCO and SOUTHCO in the state of Odisha. We are committed to providing reliable, affordable, and quality power supply, along with superior customer service.”

In May 2020, the central government came up with a proposal to privatize DISCOMs in the union territories. DISCOMs in the union territories come under the administration of the central government while the respective state governments govern those in the states.

Previously, Mercom had discussed various business models through which DISCOMs can be privatized. These can vary from licensing, distribution franchisee, and profit-sharing models. DISCOMS are at the base of most problems in the Indian energy sector. Their financial incompetence has failed to attract investments and resulted in huge stress for the power generators. Despite the $900 billion relief package provided to the DISCOMs, their dues to the power generators have only been rising. The privatization of DISCOMS is the next big hope for a turnaround in the energy sector.

Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.