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On July 19, 2000, the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. was established under the Companies Act, 1956. The Rajya Vidyut Utpadan Nigam plays a key role in prioritizing electricity production for the state’s diversified and rapid development. On July 19, 2000, the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. was established under the Companies Act, 1956. The Rajya Vidyut Utpadan Nigam plays a key role in prioritizing electricity production for the state’s diversified and rapid development. The state DISCOMs of Jaipur Vidyut Vitran Nigam Ltd. (JVVNL), Ajmer Vidyut Vitran Nigam Ltd. (AVVNL), and Jodhpur Vidyut Vitran Nigam Ltd. (JVVNL) are served by RRVUNL (JdVVNL).
The objective of Rajasthan Rajya Vidyut Utpadan Nigam Ltd.
Rajya Vidyut Utpadan Nigam Ltd.’s power generation plants have earned a unique reputation for their efficient and lucrative power generation. Nonetheless, with the establishment of the Rajasthan State Electricity Board on July 1, 1957, the electricity industry in Rajasthan was given priority, and power plants sprung up throughout the state.
Credit Strengths
Improved Production Capabilities: As of March 20, RRVUNL has a total installed capacity of 7042.35 MW for Thermal and Hydel Power generation (7684.35 MW on March 21). In FY20, it generated 31387.88 MU. The overall demand for Rajasthan State is now between 10,290 and 10,590 MW, with a price of 2.69 per unit. It has a claimed capacity of 20,490.54 MW and a system availability of 73.67 per cent.
Parental Assistance and Liquidity Position: The Government of Rajasthan (GoR) owns 100% of the firm and receives periodic grants and equity support from the state government to meet its capital expenditure and other financial needs. The firm does not generate enough cash accruals to cover debt repayment and interest payments, and it is heavily reliant on GoR for debt servicing. In FY20, it got Rs.350 crores in equity from GoR (144.39 crores in shares were issued).
Coal Supply: The Government of India’s Ministry of Coal has awarded ‘Parsa East and Kente Basan’ Coal Blocks to RRVUNL in Chhattisgarh for KTPS, SECL (Korea-Rewa & Korba) & NCL (Singrauli) for other projects.
Revenues are increasing at a healthy rate: RRVUNL’s revenues have been increasing at a healthy rate over the last several years, with a yearly average increase of over 10% from FY17 to FY19. Revenues for FY20 grew by 13% to Rs.16400.61 crores, compared to Rs.14438.43 crores in FY19. EBITDA increased by 24 per cent to Rs.6058.70 crores in FY20, compared to Rs.4860.84 crores in FY19.
Credit Risks
Climbed Rajasthan Discom Receivables: RRVUNL’s receivables increased to Rs.21863.98 Crs as of FY20 from Rs.18410.39 Crs as of FY19, and then to Rs.28416.96 Crs as of 23/03/21. Rajasthan Discoms (JVVNL, AVVNL, and JdVVNL) were mostly responsible for increasing power sales.
Debt-Funded Capital Expenditure: The corporation is constantly investing in debt-financed generation assets, putting the company in a high debt position.
On the other hand, the government has been assisting in equity infusions and grants to meet these Capital Expenditure needs. As of March 31, 2020, its Debt Equity Ratio was 7.51x, and it is predicted to decrease over time significantly.
Liquidity Position
The Government of Rajasthan (GoR) owns 100% of the firm. It receives periodic support from the state government through grants and equity to meet its capital expenditure and other financial needs. With cash accruals of Rs.1809.33 Crs in FY20 (on a combined basis) compared to debt repayments of Rs.4079.61 Crs in FY20, the company’s standalone liquidity remained tight. The firm relies on GoR for debt servicing because it does not generate cash accruals to cover debt repayment and interest payments.
The ongoing projects of the Rajya Vidyut Utpadan Nigam Limited
S.No | Name of the Unit |
1 | KALISINDH TPS UNIT I |
2 | KALISINDH TPS UNIT II |
3 | CHHABRA TPS PHASE II (UNIT-3) |
4 | CHHABRA TPS PHASE II (UNIT-4) |
5 | RAMGARH EXTN. PROJECT Stage III STG 50 MW |
Total |
6 | Ramgarh Gas Thermal Power Project Stage IV GT |
7 | Ramgarh Gas Thermal Power Project Stage IV STG |
8 | Suratgarh Supercritical TPP Unit#7 |
9 | Suratgarh Supercritical TPP Unit#8 |
10 | Chhabra Supercritical TPP Unit#5 |
11 | Chhabra Supercritical TPP Unit#6 |
Conclusion
RRVUNL was founded by the Government of Rajasthan (GoR) in the year 2000 under the provisions of the Rajasthan Power Sector Reforms Act, 1999. RRVUNL is the state power-producing utility. It is responsible for developing power projects in the state’s public sector and managing and maintaining state-owned power plants.
Rajasthan Rajya Vidyut Utpadan Nigam Ltd. has been entrusted with expanding state-owned power plants in Rajasthan and maneuvering and repairing state-owned power stations. The total number of villages and towns electrified did not exceed 42, and the installed generation capacity was just 13.27 Mega Watts.
