Payables to GenCos & TransCos
In FY22, the sector cleared-off accumulated payables from FY21 to reach pre-COVID19 levels
Payables to generation and transmission companies (GenCos and TransCos) were adversely impacted in FY21, driven by significant financial losses in the sector and an increase in consumers’ receivables. As a result, the days payable increased from 162 days in FY20 to 176 days in FY21. Notably, the utilities cleared payables which accumulated in FY21, and reverted to pre-COVID levels (~161 days) in FY22. Despite this positive trend, days payables remain much higher than desired levels, considering that LPS Rules, 2022 specify a timeline of 45 days for clearing bills.
Days Receivable recovered in FY22
Trade receivables had increased significantly in FY21, due to impact of COVID-19 year on bill collections. Notably, the sector recovered in FY22. The collection process of the discoms improved. At the same time, portion of receivables accumulated during FY21 were written-off/provisioned as bad debts in FY22, as many commercial & industrial (C&I) customers endured business disruption during COVID-19. With some receivables from FY21 yet to be collected, days receivables in FY22 ended up being higher as compared to FY20.