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. The company has a total installed capacity of 13,732 MW. 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 MSPCL 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, Rs. 91.14 Cr. during FY2023. and Rs. 188.79 Cr. during FY2024 infused 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 of PPA under multiyear tariff model wherein tariffs are determined in advance for a period of 5 years on a basis of fuel charges and fixed costs. The recent 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
While the revenues remained stable in FY2024 at Rs.32,750.80 Cr as against Rs.33,071.32 Cr in FY2023, it improved to Rs. 35,073.01 Cr in FY2025 (Est.) primarily driven by the commissioning of new capacities across thermal and solar segments during the year. Further, the revenue improvement also includes the receipt of long due delayed payment surcharges (Rs. 2,674 Cr in FY2024 & Rs 3,949 Cr in FY2023). However, PLF of the plants continue to remain moderate, improvement of which shall be a key rating monitorable. Further, while the EBITDA margins continue to improve the overall PAT moderated in FY25 (Est.) to Rs 130.48 Cr from Rs 173.44 Cr in FY24 owing to high interest and depreciation cost.

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 2-3 yrs the company has been receiving portions of these outstanding dues (~Rs. 287 Cr/ month), the outstanding receivables remain significantly high at Rs 31,855.88 Cr as on March 31, 2025 (Estimates)/ 332 days (Rs 31,264.38 Cr as on March 31, 2024/ 385 days). Therefore, timely and adequate receipt of the late payment surcharges shall be a key rating monitorable.

Elevated debt levels due to high capex intensity
While the net worth of the company has remained stable and healthy at Rs.15,548.16 Cr in FY2025 (Est.) (Rs.15,503.82 Cr in FY2024), owing to the constant capacity additions the debt levels of the company (includes long term and working capital borrowings) stands significantly high at Rs. 44,212.38 Cr as on March 31, 2025 (Est.) (Rs.43,800.88 Cr as on March 31, 2024) leading to high gearing levels. On an average the overall capex spends ranges between ~Rs 2000- 2,500 Cr. Further, inadequate and delayed cash accrual generations also lead to low DSCR (below unity), however, repayments are managed through equity infusions by the GoM.