Payables to GenCos & TransCos FY23
The sector cleared significant dues to GenCos & TransCos in FY23 driven by the LPS Rules
Trade Payables to GenCos and TransCos reduced by INR 15,000 Crore, despite 24 percent increase in power purchase cost during FY23 compared to FY22. Consequently, Days Payable of the sector fell from 166 days in FY22 to 126 days in FY23. However, there still remains room for improvement towards lowering Days Payable to 45 days.
The LPS Rules played a vital role by liquidating almost 50,000 Crore of dues to central GenCos & TransCos in FY23 as well as instilling discipline among utilities to make timely bill payments. Notably, INR 140,000 Crore of legacy dues have been converted to EMIs under the LPS rules, with target for 100 percent liquidation by mid-2026.
Trade Receivables FY23
Customer collection improved significantly, with Days Receivable improving to 119 days in FY23
The sector maintained a high collection efficiency from FY22 to FY23. Further, some utilities provisioned off their legacy receivables in a positive step towards cleaner books. As a result, net trade receivables increased marginally by 2% as compared to 18% increase in operational revenue in FY23 as compared to FY22.
Government dues, remain an area of concern. Utilities had unpaid government dues of almost 85,000 Crore at the end of FY23, contributing ~35% of the total receivables.