Indian power utilities have seen improvements in their receivables over the past two years, especially since the implementation of the late payment surcharge rules in June 2022. The average receivable days of seven Indian power utilities have fallen to 85 in FY23 from 142 days in FY21, as per the ratings agency.
The reduction in receivable days, especially for renewable energy generation companies, by about 100 days in FY23 has been driven largely by receipt of current payments and outstanding dues in monthly instalments, in line with the late payment surcharge rules. The risks of being barred from accessing power exchanges and of financial penalties have prompted discoms to make timely payments. However, the pace of capex for power utilities is expected to remain high, averaging around $7.9 billion a year in FY24 and FY25 compared with $6.2 billion in FY23 on renewable capacity additions, it said.