Power Grid Corporation of India (POWERGRID) gets a major boost as the Cabinet raises its per‑subsidiary equity investment limit from ₹5,000 crore to ₹7,500 crore, unlocking faster execution of massive transmission projects to support India's 500 GW non‑fossil energy target by 2030.+2

The Big Decision – What Changed?

Cabinet Committee on Economic Affairs (CCEA), chaired by PM Narendra Modi, approved the enhanced delegation under Maharatna guidelines on February 24, 2026:

Parameter	Before	After
Per‑Subsidiary Limit	₹5,000 Cr	₹7,500 Cr
Overall Cap	15% of net worth	Unchanged

Why it matters: This allows POWERGRID to invest more aggressively in subsidiaries/SPVs without repeated government approvals, speeding up bids for large transmission projects.

Why Now? India's 500 GW Green Energy Push

India's 500 GW non‑fossil target by 2030 needs massive transmission upgrades:

• Renewable sites far from load centres: Ladakh solar, Gujarat wind, Rajasthan hybrids → need UHVAC/HVDC corridors for bulk evacuation.
• Transmission capex: ₹9.16 lakh crore planned (2023–2032) for central/state systems to handle 458 GW peak demand by 2032.
• POWERGRID's role: Transmits ~50% of India's power; needs to scale for geographically dispersed RE integration.

Old limit bottleneck: ₹5,000 Cr cap restricted SPV equity for ₹20,000+ Cr projects under TBCB (Tariff Based Competitive Bidding).

What This Unlocks for POWERGRID

Project Acceleration

• Bigger TBCB bids: Can now back larger, complex projects like UHVAC (Ultra High Voltage AC) and HVDC (High Voltage DC) lines.
• RE corridors: Faster green energy evacuation from remote solar/wind parks to cities/industry hubs.
• Competition boost: Deeper participation → better price discovery → lower tariffs for consumers.

Financial Impact

Metric	Impact
Capex flexibility	Larger SPVs → more projects won
ROE stability	Regulated returns (14–15.5%) on equity invested
Debt capacity	Leverage maintained at ~6x
Order book	₹3 lakh Cr capex planned till 2032

Market Reaction & Stock Outlook

Share price: POWERGRID gained ~3–5% post‑announcement as investors priced in faster order wins and execution.

Key positives:

• Monopoly franchise: Largest transmission utility (~50% ISTS share).
• Regulated returns: Stable 14–15.5% RoE on equity.
• Green tailwinds: Essential for 500 GW target.

Watchouts:

• Interest rate sensitivity: Debt‑heavy balance sheet.
• Execution delays: Land acquisition, approvals.
• TBCB competition: Private players gaining share.

Strengths of Power Grid Investment Hike

• Unlocks faster execution of ₹3 lakh Cr transmission capex pipeline.
• Enables larger UHVAC/HVDC bids critical for 500 GW RE evacuation.
• Removes govt approval bottlenecks for subsidiary investments.
• Enhances TBCB competitiveness vs private transmission players.
• Stable regulated RoE (14–15.5%) on growing equity deployment.
• Strategic monopoly in ISTS transmission (~50% market share).

Risks of Power Grid Expansion

• High debt leverage (~6x) sensitive to interest rate rises.
• Land acquisition/approval delays plague large transmission projects.
• Intensifying TBCB competition from private players.
• Policy/regulatory changes in transmission tariffs.
• Execution risk scaling UHVAC/HVDC technology at scale.

FAQs

1. What was the key Cabinet decision for Power Grid?
Cabinet raised POWERGRID's per‑subsidiary equity investment limit from ₹5,000 Cr to ₹7,500 Cr (overall cap 15% net worth unchanged).timesofindia.indiatimes+1

2. Why raise the limit now?
To enable POWERGRID to bid for larger transmission projects needed for 500 GW non‑fossil energy evacuation from remote solar/wind sites.indianexpress+1

3. What types of projects will this unlock?
UHVAC and HVDC transmission corridors for long‑distance bulk power transfer from RE parks to load centres.timesofindia.indiatimes+1

4. How does this benefit shareholders?
Faster project wins → higher equity deployment → stable regulated RoE (14–15.5%) on growing asset base.​

5. Is Power Grid's debt risk rising?
No – leverage stays ~6x; higher equity cap actually improves funding mix for subsidiaries.​

6. What is POWERGRID's capex outlook?
₹3 lakh Cr planned till 2032, including ₹2.7 lakh Cr inter‑state transmission projects.​

7. Market reaction to the announcement?
Shares gained 3–5% as investors welcomed execution acceleration and green energy tailwinds.