Maharashtra State Electricity Distribution Company (MSEDCL) is aiming to carve out agricultural load in a separate company by April this year and to float a public issue by the end of 2026. In an interview with Raghavendra Kamath, its Chairman and Managing Director Lokesh Chandra talks about the company’s plans as well as issues in the power sector in the state. Excerpts:
Can you throw some light on your debt refinance plans?
MSEDCL has planned to refinance at least 50% of its Rs 98,000-crore debt to optimise its capital structure and reduce financing costs. Currently, the company’s annual interest expenditure stands at nearly Rs 8,000 crore, prompting a focused drive to replace high-cost debt with lower-rate borrowings from financial institutions (FIs) and nationalised banks.
This initiative has already yielded substantial savings. MSEDCL negotiated rate reductions on high-cost loans worth Rs 60,000 crore, achieving interest cost savings of around Rs 2,500 crore over the loan tenures.
Recently, we refinanced Rs 13,000 crore of expensive debt from SBI using lower-cost funding from other nationalised banks, FIs, and internal cash accruals.
Additionally, the company prepaid Rs 5,000 crore to REC and PFC under the revolving bill payment facility. These steps significantly lower borrowing costs, enhance cash liquidity, and bolster MSEDCL’s financial resilience amid rising energy demand and renewable expansion.
How much are you looking to raise via IPO and what is the objective?
MSEDCL is preparing for an IPO to raise anything between Rs 5,000 crore and Rs 10,000 crore. The objective is to refinance a portion of the company’s debt burden, thereby optimising its balance sheet and enhancing long-term financial sustainability.
This capital infusion will directly alleviate interest costs, freeing up significant cash flows for critical investments in grid modernisation, renewable energy integration, battery storage, and capacity expansion to meet Maharashtra’s surging power demand (projected at 6% CAGR to 39,000 MW peak by FY32).
By tapping equity markets, MSEDCL aims to demonstrate its robust operational performance, strong revenue growth from a diversified portfolio including over 30 GW solar tie-ups, and ability to attract institutional investors.
Successful execution will improve liquidity, lower leverage ratios, and position the utility as a more agile player in India’s energy transition, while complying with regulatory mandates for discom financial reforms.
Maharashtra is coming up with 2.5 GW of renewable through competitive bidding. Could you please elaborate on these projects?
MSEDCL has launched a tender for procuring 2,500 MW of inter/intra-state grid-connected renewable energy round-the-clock supply on a long-term basis. Available bid capacities are 1,250 MW or the full 2,500 MW.
This initiative addresses the intermittency of single RE sources by blending complementary renewables like solar and wind with thermal generation or BESS (battery energy storage systems ).
This will bring in enhanced grid stability, optimal utilisation of available power, and significant cost savings for consumers. The tender was floated on January 2, 2026, with a pre-bid meeting on January 21, marking a pivotal step towards Maharashtra’s renewable energy goals.
Maharashtra is witnessing a spurt in electricity demand. How is the state gearing up to mitigate this demand?
MSEDCL anticipates around 6% growth in Maharashtra’s electricity demand, projecting consumption of nearly 280,000 million units and a peak demand of 45,000 MW by FY32… To mitigate this, MSEDCL has adopted a scientific, data-driven demand forecasting methodology under the resource adequacy framework.
This incorporates key drivers like economic growth, data centres, green hydrogen, climate variability, rapid urbanisation, industrial expansion, electric vehicle adoption, and critical infrastructure loads, enabling proactive capacity planning and resource tie-ups. By FY32, MSEDCL will have secured a diversified 80.2 GW portfolio.
The strategy emphasises high renewable penetration through large-scale solar of 25.5 GW, 0.9GW of hydro, 4 GW hybrid, and 1.5 GW of firm and dispatchable renewable energy (FDRE) additions via round-the-clock contracts, curtailing reliance on conventional sources.
Complementing this, approximately 6.5 GW of storage capacity — including 6 to 8 hours of PSP (pumped storage projects) and two to four hours of BESS — delivers 25-30 GWh of discharge energy to shift surplus renewables to evening peaks and manage intermittency.
What is your outlook on separation of agriculture business?
MSEDCL is actively pursuing the separation of its agriculture business, with plans to demerge it into a fully independent entity ahead of its IPO. Key reasons include isolating Rs 76,000 crore in agricultural arrears (out of total Rs 96,000 crore dues), which strain cash flows, inflate working capital borrowings, and hinder financial health.
This ring-fencing prevents liabilities from impacting the core urban/industrial distribution operations, enabling cleaner balance sheet for listing a 10% stake via IPO to fund transmission and distribution capex.
The demerger aligns with state directives for utility reforms and complements ongoing agri-feeder segregation for accurate metering and daytime solar supply under the Mukhymantri Saur Krushi Vahini Yojana (MSKVY) 2.0. The viability will improve post-separation.
How do you look at demand from data centres across India?
Data centre demand across India represents a transformative growth driver for the power sector, with Maharashtra emerging as a prime hub due to its robust digital ecosystem, strategic logistics, and world-class connectivity.
MSEDCL projects nearly 1.5 GW of additional load from data centres by 2030, concentrated in key clusters like Mumbai, Pune, and Nagpur.
This surge aligns with India’s digital boom — fuelled by AI, cloud computing, 5G rollout, and data localisation policies — positioning data centres as high-reliability, round-the-clock consumers with minimal load factor volatility.
For MSEDCL, it offers stable revenue streams, long-term contracts, and opportunities to deploy green power solutions like renewable energy — round-the-clock (RE-RTC) and BESS to meet their stringent SLAs (service level agreements) for 99.99% uptime.
Challenges include ensuring dedicated feeders, green certifications, and grid reinforcements amid competing agri/industrial demands. MSEDCL is proactively engaging hyper-scalers and developers through dedicated cells, tariff incentives for off-peak shifts, and renewable tie-ups to capture this approximately10-15% CAGR opportunity while advancing Maharashtra’s net-zero ambitions.