­West Bengal State Electricity Transmission Company Limited (WBSETCL) was incorporated in April 2007, post unbundling of the erstwhile West Bengal State Electricity Board (WBSEB), in line with the requirement under the Electricity Act 2003. The erstwhile WBSEB has been unbundled into West Bengal State Electricity Distribution Company Limited (WBSEDCL) (rated at ACUITE BBB/Stable/A3+) and West Bengal State Electricity Transmission Company Limited (WBSETCL) in accordance with a transfer scheme notified by the State Government of West Bengal dated January 2007. As a part of the transfer scheme, the business of power transmission and load dispatch activities have been transferred and vested in WBSETCL and the business of power distribution and activities related to hydropower undertakings have been transferred and vested in WBSEDCL. Currently, WBSETCL operates and maintains a transmission network of 16311 CKM of Extra High Voltage Transmission lines along with 139 sub-stations (ranges from 60 KV to 400 KV) and total transformation capacity of 38294 MVA, spread over the entire stretch of the state of West Bengal. Moreover, WBSETCL maintained a transmission system availability of more than 99 per cent and transmission losses less than 2.75 per cent in FY2023.

­Not Applicable

­Acuité has taken a standalone view of the business and financial risk profile of WBSETCL to arrive at the rating. Acuité has also factored in benefits emanating from the ownership by Government of West Bengal. GoWB’s financial support to WESETCL is in the form of its 100 per cent ownership and its guarantee for certain borrowings of WBSETCL.

­Timely support from the Government of West Bengal
Timely tariff revision
Any significant increase in receivables from WBSEDCL

The company’s liquidity is strong marked by net cash accruals of Rs.1176.53 Cr. in March 31, 2024 as against debt repayment obligation of Rs.335.18 Cr. The cash and bank balances of the company stood at Rs.38.02 Cr. as on March 31, 2024 as compared to Rs.93.36 Cr. as on March 31, 2023. The company has put aside a fund of Rs.330.50 Cr. as on March 31, 2024, to be utilized for redemption of debentures and unforeseen exigencies. The current ratio stood at 1.09 times as on March 31, 2024, on account of high other current liabilities comprising of amount received from Power Grid Corporation, consumer contribution to capital asset, payable to WBSETCL Pension Trust and provision for employee benefits. Acuité believes that going forward the company will continue to maintain a strong liquidity position due to steady accruals. 

­­Acuité believes that the company will maintain 'Stable' outlook over the medium term due to the steady cash flows inherent in the power transmission business along with its strategic importance and the support provided by the state government. The outlook may be revised to 'Positive' in case the company registers consistent growth in revenues while maintaining its profitability and liquidity. Conversely, the outlook may be revised to 'Negative' in case of any unexpected deterioration in the financial profile, elongation of the working capital cycle or any significant pressures on the fiscal position of the state government.

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’ s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in