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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 1600.00 | ACUITE A | Stable | Assigned | - |
| Bank Loan Ratings | 7950.00 | ACUITE A | Stable | Reaffirmed | - |
| Bank Loan Ratings | 300.00 | - | ACUITE A1 | Assigned |
| Bank Loan Ratings | 150.00 | - | ACUITE A1 | Reaffirmed |
| Total Outstanding | 10000.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE A’ (read as ACUITE A) and the short term rating of 'ACUITE A1' (read as ACUITE A one) on the bank loan facilities of Rs.8100.00 Crore of Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL). The outlook is 'Stable'.
Acuite has assigned its the long-term rating of 'ACUITE A' (read as ACUITE A) on the bank facilities of Rs.1600.00 Crore and the short term rating of 'ACUITE A1' (read as ACUITE A one) on Rs.300.00 Crore bank facilities of Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL). The outlook is 'Stable'. Rationale for Reaffirmation and Rating assigned The rating continues to factor the strategically important role of DHBVNL in the state of Haryana and the support received by DHBVNL in the form of subsidies & guarantees, defined collection structure/cashflow trapping which ensures timely payment of debt obligations and improved operating efficiency. DHBVNL has received aggregate subsidies to the tune of Rs. 4173.39 crore in FY24 as against Rs. 3733.42 Cr. in FY23. The majority of borrowings by DHBVNL are covered by a guarantee extended by the Government of Haryana. The rating gets additional comfort from increasing active consumers Y-O-Y and reducing operational losses (AT&C, T&D) over the years. These strengths are partly offset declining profitability, stretched liquidity and moderate financial risk profile. |
| About the Company |
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Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL), incorporated in 1999, is a wholly owned entity of Government of Haryana (As on March 31, 2022, GOH held 96.85% stake in DHBVNL and the balance was held by Haryana Vidyut Prasaran Nigam Limited) and is engaged in distribution of power. DHBVNL purchases power primarily from Central Generating Stations (CGS) and from renewable sources. It is responsible for the distribution and retail supply of electricity in the South zone of Haryana comprising of Hisar, Bhiwani, Sirsa, Faridabad, Fatehabad Gurugram-1, Gurugram-2, Palwal, Rewari, Jind and Narnaul circles with approx. 39 lac consumers (FY22) across all categories.
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| Unsupported Rating |
| ACUITE BB+/Stable |
| Analytical Approach |
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Acuité has considered the standalone business and financial risk profiles of DHBVNL and has also factored in support extended by Government of Haryana (GOH) in the form of an unconditional and irrevocable guarantee.
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| Key Rating Drivers |
| Strengths |
| Strategically important role of DHBVNL in the state of Haryana
Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL), incorporated in 1999, is a wholly owned entity of Government of Haryana. As on March 31, 2023, GoH held 96.85% stake in DHBVNL and the balance was held by Haryana Vidyut Prasaran Nigam Limited) and is engaged in distribution of power. DHBVNL purchases power primarily from Central Generating Stations (CGS) and they are making efforts to source energy from renewable sources. It is responsible for the distribution and retail supply of electricity in the South zone of Haryana comprising of Hisar, Bhiwani, Sirsa, Faridabad, Fatehabad Gurugram-1, Gurugram-2, Palwal, Rewari, Jind and Narnaul circles. The company has been receiving support from Government of Haryana in the form of subsidy and guarantee extended. Government of Haryana has infused equity of Rs.61.59 crore during FY22. Hence, support form GOH is crucial for rating and hence any credit profile of state of Haryana is of key importance. As on January, 2025, the current active consumers is approximately 43.76 lacs. The consumer profile of the discom comprises of industrial, domestic, agriculture and commercial. Sustainable improvement in the AT&C and T&D losses DHBVNL as experienced sustained improvement in the Transmission and Distribution Losses [T&D] and Aggregate Technical and Commercial Losses [AT&C] over a period of last 4 years accrued to the implementation of multiple initiatives, capex to improve transmission lines, installing substations, among others. The T&D and AT&C losses have been improving sequentially from 16.93% in FY21 to 10.58% in FY 24 and 15.97% in FY21 to 10.25% in FY24 respectively. Further, MSEDCL has also recorded significant improvement in its collection efficiency which stood at 100.37% for FY 24. |
| Weaknesses |
| Declining Scale of Operations & Profitability
DHBVNL reported the total revenue from operations of Rs. 24,289.46 Cr. in FY 24 as against Rs. 25,281.49 Cr. during FY 23 i.e., with decline in the revenue to the tune of 3.92%. Significantly, EBIDTA declined from Rs. 1558.41 Cr. in FY 23 to Rs. 782.93 Cr. in FY 24. The net profits (PAT) declined from Rs. 711.12 Cr. in FY 23 to Rs. 204.34 Cr. in FY 24. The deterioration in the business risk profile is mainly due to decline in the revenue against FSA (Fuel & Surcharge Adjustment) charged by the discom towards the consumers. However, number of active consumers and sale of power within state & outside state has been improved. Further, the utility booked the revenue of Rs. 19,029.24 Cr. till December 2024 with EBIDTA loss of Rs. 1,975.56 Cr. and net loss of Rs. 3,028.53 Cr. Acuite believes going forward, scale of operations along with profitability margins will be a key rating sensitivity for the discom. Moderate Financial Risk Profile The financial risk profile of the company is moderate in nature with gearing ratio of 2.48 times for FY 24 against 1.98 times in FY 23. The net worth stood at Rs. 4018.51 Cr. as of March 31, 2024, against Rs. 3,347.69 Cr. as of March 31,2023. The borrowings by DHBVNL are covered by guarantee extended by Government of Haryana. The total outside liability to tangible net worth slightly improved to 4.47 times as of March 31,2024 as against 4.51 times as on March 31, 2023. ISCR stood at 2.05 times for FY 24 against 3.26 times for FY 23. The financial risk profile is expected to remain moderate over the medium term on account of regular planned capex of approximately Rs. 800-1200 Cr. every year for better distribution infrastructure, load growth and reducing AT&C losses. Susceptibility of performance to changes in the regulatory framework. DHBVNL’s revenues are influenced by the regulatory framework governing the power sector. Revenues of state distribution utilities like DHBVNL are determined by state electricity regulatory commissions. The Haryana Electricity Regulatory Commission (HERC) considers key parameters like the cost structure and expected to return on equity to arrive at distribution tariffs, wheeling & distribution, and retail supply under MYT Framework (Multi Year Tariff). Acuite believes that significant changes in the regulatory environment will impinge on the credit profile of the company. |
| Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix) |
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Acuite takes into consideration the benefit derived by DHBVNL from the 100% ownership of Government of Haryana, either directly or indirectly.
Stress Case Scenario |
| Rating Sensitivities |
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| Liquidity Position |
| Stretched |
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The liquidity profile of the company is stretched marked by generating net cash accruals of Rs. 98.17 crore (excluding exceptional item) against debt obligation of Rs. 479.42 Cr. for the same year. The debt obligation has been timely repaid with short-term working capital limits. However, all these borrowings are supported by irrevocable guarantee extended by Government of Haryana. The company has unencumbered cash and bank balance of Rs. 326.44 crore as on March 31, 2024. The current ratio of the company stood at 1.44 times in FY 2024. The liquidity is further supported by undrawn bank limit utilizations as average fund-based bank limit utilisation stood at 42.74% and the non-fund-based limit utilisation stood at 69.57% for last 12 months ending January 2025. The liquidity profile is expected to remain stretched over the medium term.
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| Outlook - Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 24289.46 | 25281.49 |
| PAT | Rs. Cr. | 204.34 | 711.12 |
| PAT Margin | (%) | 0.84 | 2.81 |
| Total Debt/Tangible Net Worth | Times | 2.48 | 1.98 |
| PBDIT/Interest | Times | 2.05 | 3.26 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable. |
| Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite) |
| Not applicable |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm • Public Finance - State Government Ratings: https://www.acuite.in/view-rating-criteria-26.htm • Explicit Credit Enhancements: https://www.acuite.in/view-rating-criteria-49.htm |
| Note on complexity levels of the rated instrument |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
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