Power grid corporation is an Indian, central public sector company undertaken by the Ministry of Power and Government of India, having its headquarters in Gurugram. It mainly focuses on the transmission of bulk power across the country and transmits 50% of the total power generated in India using its transmission networks. On delving deep into the history and establishment of the company we see that, the Power Grid Corporation, initially known as “National Power Transmission Corporation Limited” under the Company Act 1956, was established on 23 October 1989. Its focus shifted to maintaining high-voltage transmission systems in the country, leading to the renaming of the company as Power Grid Corporation. This foundational information is crucial for a comprehensive understanding of the company before delving into the intended topic.
Market Capitalization of Power Grid Corporation:
The company having a market capital of 3,12,640 Cr is already financially well stable. Although the net worth of the company is 87,145 Cr, the company witnessed a rise to 16,145 Cr. Furthermore, a glance at the shareholding pattern of the company for the year 2024 exposes that, nearly 51% is held by the Indian government, 28.73% is occupied by foreign investors, 11% is from mutual funds, 4.71% from other domestic institutions and 3.6% from the retail investors.
A Rise in the Borrowing Limit:
The Initial approval of the board to increase the borrowing limit from 12,000 Cr to 15,000 Cr for fiscal year 2024 might result in another search in the borrowing limit of 15,000 Cr to 16,000 Cr for fiscal year 2026 followed by the decision taken on 35th annual general meeting of the company. This decision of the company and agreement of the shareholders will definitely promote the company and undoubtedly contribute to the growth of the company in significant directions. As a result, it will facilitate the seamless transmission of the network to every corner of the country without intervention of any other parties.
What is the Purpose of ₹15,000 Crore Fund?
The allocation of 15,000 Cr fund will be directed towards expanding its network concentrating on building better infrastructure and on modernizing its systems to ensure better growth. This approach may facilitate the resolution of complex issues which also provides easier and efficient solutions ultimately meeting all the requirements through implementation of transmission network that is future-proofed.
Impact on Power Grid’s Balance Sheet:
The increase in the borrowing limit will lead to higher liabilities on the company’s balance sheet in addition to a drastic impact on the debt-to-equity ratio. This increase in the ratio will be closely monitored by the investor ultimately resulting in the good image of the Power grid corporation company.
In conclusion, increasing the borrowing limit to 15,000Cr will be directed towards growth of company by building better infrastructure and modernizing its systems.
By Ayush Gandewar
Reporting for,
TRUE TO LIFE News Media Pvt Ltd