11th Integrated Rating Methodology

Since 2012, Integrated Rating Exercise has been executed annually under the aegis of Ministry of Power (MoP) with the aim of evaluating performance of power distribution utilities. With the current report, the Ministry is publishing the results and insights from the 11th edition of this annual exercise, conducted with the Power Finance Corporation as the nodal agency.

The framework adopted for the Rating Exercise is approved by MoP and has evolved over the years to reflect the changes in the power sector and national priorities. The rating framework underwent a significant overhaul during the 10th Integrated Rating Exercise – with focus on capturing the true financial picture (financial metrics on cash-basis instead of accrual basis), vital role of external environment (state government, state regulator), conformity to best sectoral practices (captured as negative scoring of Specific Disincentive metrices)

The 11th Integrated Rating continues the same rating framework used the year before – with the objective of capturing the performance changes on the same methodology. The framework consists of 15 base rating metrics and 9 disincentives, which together provide a score out of 100—to holistically capture a discom’s performance. Based on the integrated rating score and overriding conditions, discoms are being assigned specific grades (A+, A, B, B-, C, C- and D).

As part of the 11th Integrated Ratings, data has been collected and ratings published for 57 discoms (both state owned and private) and 12 power departments.