Rajasthan’s power distribution companies to raise Rs 1,500 cr through bonds
Three Rajasthan-based power distribution companies (discoms) — Jaipur, Jodhpur and Ajmer — will raise Rs 500 crore each through bonds. Rating agency ICRA has assigned provisional “BBB” rating to the bonds with “stable” outlook as the state government would provide unconditional and irrevocable guarantee on the securities.
The rating factors in the companies’ status as a wholly owned power sector entity of the state government. Another positive is the cost-plus tariff framework, which allows the discoms to recover the uncontrollable cost variation on a quarterly basis.
ICRA said the tariff hike approved by the Rajasthan Electricity Regulatory Commission in February last year is expected to improve the cash flows of these discoms, while lowering the revenue gap.
