Mahatransco Eyes Up to ₹10,000 Crore Through Proposed IPO

Maharashtra State Electricity Transmission Company Ltd (MSETCL), better known as Mahatransco, is preparing for a possible stock market debut that could see the state-owned power transmission utility raise as much as ₹10,000 crore, or around $1 billion. 

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The proposed IPO is still taking shape. Mahatransco is currently working on appointing investment bankers and legal advisers, while the final size and structure of the issue will be decided closer to the filing of its draft offer documents. 

At the levels currently being considered, the company could seek a valuation of around ₹40,000 crore to ₹50,000 crore. The IPO may include both fresh shares issued by Mahatransco and an offer for sale by its parent, MSEB Holding Company Ltd.  

Mahatransco Begins Search for IPO Advisers 

Work on the proposed listing has already begun at the adviser level. 

Mahatransco has invited bids from merchant bankers and may appoint six firms to manage the IPO, although it has kept the option of choosing a smaller or larger syndicate. 

The deadline for merchant bankers to submit their bids was September 7. Eligible bidders are scheduled to make presentations between September 15 and September 17. 

The company is running a separate process to appoint legal advisers. It has sought proposals from law firms to act as counsel to the company and the selling shareholder, as well as counsel to the merchant bankers. 

Bids for these legal mandates are due by September 28, followed by presentations on October 6 and October 7. 

A Rare Listing From the State Power Sector 

If the proposed IPO goes through, Mahatransco would become the first state government-owned electricity transmission company to list on the stock exchanges. 

Its listing plans are unfolding alongside those of Maharashtra State Electricity Distribution Company Ltd, or Mahavitaran. The distribution utility has recently appointed six investment banks for an IPO that could raise between $500 million and $1 billion. 

While central government-owned utilities such as NTPC, NHPC and Power Grid are already listed, state-owned electricity utilities remain uncommon on Indian exchanges. 

Mahatransco and Mahavitaran could therefore become the first listed state-owned transmission and power distribution companies, respectively. 

Other companies promoted by state governments and already trading on Indian exchanges include Gujarat Energy, Gujarat Alkalies and Chemicals, Gujarat Mineral Development Corporation, Tamil Nadu Newsprint and Papers, Punjab Communications and Jammu & Kashmir Bank. 

Mahatransco Operates Over 52,800 Circuit Km of Transmission Lines 

Mahatransco emerged from the restructuring of the erstwhile Maharashtra State Electricity Board and is wholly owned by MSEB Holding Company. 

As Maharashtra’s state transmission utility, it carries electricity from generating stations to distribution companies and large consumers. It also plans and coordinates the state’s intra-state transmission network and helps connect renewable energy projects to the grid. 

Its network currently includes 52,807 circuit kilometres of transmission lines and 760 extra-high-voltage substations across Maharashtra, placing it among India’s largest state transmission utilities. 

For now, the IPO remains at the preparatory stage. The appointment of bankers and legal advisers will move the process forward, but the eventual fundraising size, valuation and structure will become clearer only as Mahatransco gets closer to filing its draft offer documents.