22 April,2026 07:49 PM IST | Mumbai | mid-day online correspondent
CM Devendra Fadnavis. File Pic
In a major policy decision, the Maharashtra government, CM Devendra Fadnavis has approved a comprehensive financial and structural overhaul of Mahavitaran. The move is aimed at improving efficiency, reducing losses and supporting the state's ambition of becoming a "USD 1 trillion economy."
A government resolution issued by the Industry, Energy, Labour and Mining Department outlines a new roadmap for the state's largest power distribution company, which serves around 3.5 crore consumers.
One of the biggest steps in the reform plan is the state government taking over loans worth Rs 32,679 crore.
These loans had built up mainly due to unpaid agricultural power dues, which forced the company to borrow heavily. To manage this burden, the government will issue 15-year bonds with a 10-year break on principal repayment.
Officials believe this step will significantly improve Mahavitaran's financial health and reduce pressure on its balance sheet.
A key part of the reform is the separation of agricultural and non-agricultural operations.
A new entity, MSEB Solar Agro Power Limited (MSAPL), will be created to handle power supply for around 4.5 million farmers.
The remaining non-agricultural business will cater to industrial, commercial and household consumers, operating on commercial principles to ensure better service and reliability. Both entities will be treated as deemed distribution licensees under the Electricity Act, 2003.
Even after the split, Mahavitaran will continue to handle power procurement and maintain infrastructure for both entities in the initial phase. The agricultural arm will pay service charges for these services.
This arrangement is expected to ensure a smooth transition without disrupting power supply.
The government has also approved plans for an Initial Public Offering (IPO) of the non-agricultural arm.
The process is expected to begin six to nine months after the restructuring is completed. Early estimates suggest the IPO could raise between Rs 7,500 crore and Rs 10,000 crore. These funds will be used for expanding infrastructure, installing smart meters, upgrading digital systems, and supporting clean energy projects.
The restructuring will come into effect from April 1, 2026. A high-level committee led by Chief Secretary Rajesh Aggarwal will monitor the implementation. The government aims to complete the process by March 31, 2027, ensuring that all targets are achieved on time.
Officials say the reforms will bring greater transparency in subsidies, especially in the agriculture sector, and help attract private investment.
The broader goal is to move Mahavitaran from a loss-making position to long-term profitability while improving service quality for consumers. As the government noted, the reforms are designed to "strengthen the balance sheet and enable sustainable growth" in the power distribution sector.
(With IANS Inputs)
