­Strategic importance to GoM along with limited offtake risk
MSPGCL is wholly owned by GoM through MSEB Holding Company Limited and hence holds a strategic importance to GoM. The company has the highest overall generation capacity and highest thermal installed capacity amongst all the states within India and is the second highest state owned generation company in terms of installed capacity. Further, the company has a long term PPAs of 25 years signed with MSEDCL for supply of its entire generated power with tariffs being regulated by Maharashtra Electricity Regulatory Commission (MERC). MSEDCL is a backbone of the power sector infrastructure in Maharashtra with a consumer base of over 25 million wherein 40% of its power requirement is catered by MSPGCL thus limiting the offtake risk of the company to a considerable level. Further, being a GoM holding, government has been regularly supporting the company in the form of timely equity infusions, through MSEB Holding.

Acuité believes that MSPGCL, shall continue to reap benefits from timely operational and financial support of GoM.

Low revenue risk and procurement risk
The tariffs for power sources are regulated by MERC and are designed at cost-plus nature under multiyear tariff model wherein tariffs are determined in advance for a period of 5 years on a basis of variable fuel charges and fixed costs. The last upward revision in these tariffs happened in March 2025. Further, the company has a long-term FSA with companies like Western Coalfield Limited, Mahanadi Coalfields Limited, South-Eastern Coalfields Limited and Singareni Collieries Company Limited. The company also has a bridge linkage MoU with Western Coalfield Limited and Singareni Collieries Company Limited for uninterrupted supply of fuel.

Improving revenues owing to capacity additions
The revenues improved to Rs.37,777.34 Cr. in FY2025 from Rs.32,752.32 Cr. in FY2024, primarily driven by reduced fuel adjustment charges, true-up bill received in FY2025 of Rs.2814.42 Cr. and increase in sale of power attributable to the capacity commissioning. However, PLF of the plants continue to remain moderate, improvement of which shall be a key rating monitorable.

­Stretched receivables cycle and delayed recovery of late payment surcharges
The company has signed long term PPA (25 Years) to supply its entire power to MSEDCL. Thus, any dispute or weakening of the credit profile of the off taker puts MSPGCL under serious counter party risk. Further, the receivables include the contractual accumulated receivables with disputed claims (known as late payment surcharges) between MSPGCL and its counter party. While over the past 3 yrs the company has been receiving portions of these outstanding dues (~Rs. 287 Cr/ month) which is improving the receivable cycle; however, the outstanding receivables remain significantly high at Rs.31,549.53 Cr. as on March 31, 2025/ 335 days. Therefore, timely and adequate receipt of the outstanding dues shall be a key rating monitorable.

Elevated debt levels due to high capex intensity
While the net worth of the company has remained healthy at Rs.15,458.12 Cr. as on March 31, 2025, however, owing to the constant capacity additions the debt levels of the company (includes long term and working capital borrowings) stands significantly high at Rs.44,199.36 Cr. as on March 31, 2025 (Rs 43,801.59 Cr. as on March 31, 2024) leading to high gearing levels. On an average, the overall capex spends ranges between ~Rs.3000 - 3,500 Cr. Further, while in FY2025, accruals were sufficient to meet the debt obligations, however, generally the debt service coverage ratio have remained below unity, with repayments being managed through additional debt raise and equity infusions by the GoM.