Power Grid’s record is built on a regulated monopoly that converts profit into cash: operating cash flow has covered reported profit at least 1.5 times in each of the last six years, and the statutory audit opinion has been unqualified throughout. Three things cut against that stability. The board has been structurally non-compliant with independence rules for seven consecutive years, drawing exchange fines and a qualified secretarial audit opinion. Unsecured loans, advances, and guarantees to subsidiary and joint-venture project SPVs run into thousands of crores, and the consolidated audit relies on a large tail of unaudited subsidiaries and JVs. And impairment on the Energy Efficiency Services Limited investment has escalated sharply to ₹210.39 crore in FY26.
Key findings
- Board independence has been structurally non-compliant for seven years
Major- The Secretarial Auditor reported that half the Board was not independent for the full year FY2025-26, and the Company had no Independent Woman Director from 1 April 2025 until 15 May 2025. The same non-compliance, half the Board not independent, was reported in FY2023-24, FY2022-23, FY2021-22, and FY2019-20. NSE and BSE imposed fines for board and committee composition failures in the quarters ended 31 December 2024, 31 March 2025, and 30 June 2025. - Impairment on the EESL investment has escalated sharply to ₹210.39 crore
Major- Power Grid provided ₹210.39 crore for impairment of its investment in Energy Efficiency Services Limited in FY26, up from ₹51.70 crore in FY25. Aggregate impairment in the value of investments on the standalone books reached ₹428.53 crore as of FY26, compared with ₹228.02 crore in FY25. - Unbilled receivables have risen sharply as provisional billing continues
Minor- Unbilled receivables in the transmission segment rose from ₹3,865.59 crore in FY25 to ₹8,623.30 crore in FY26, of which only ₹4,985.14 crore was billed in the subsequent financial year. Transmission income recognised on a provisional basis, where final CERC tariff orders are pending, was ₹1,244.67 crore in FY26. Receivable days rose to 91 days in FY26 from 63 days in FY25, a 44% year-on-year increase. - The consolidated audit relies on a large tail of unaudited subsidiaries and JVs
Minor- The statutory auditors issued an unqualified opinion on the standalone and consolidated financial statements for every year from FY2019-20 through FY2025-26. The consolidated financial statements for FY2025-26 include 10 unaudited subsidiaries with total assets of ₹9,573.58 crore and 12 unaudited joint ventures, all certified by management. The Secretarial Audit Report for FY2025-26 gave a qualified opinion, noting the board composition non-compliance. - A large-scale consolidation of the TBCB SPV layer is underway
Minor- In FY26, 17 TBCB SPVs were amalgamated into two subsidiaries effective 1 March 2026, and the Board approved amalgamation of a further 28 TBCB SPVs into two other subsidiaries on 19 March 2026. POWERGRID’s equity stake in Torrent Power Grid Limited reduced from 26% to 9.75% because it did not contribute to an additional equity call, causing it to cease being a joint venture effective 30 May 2025. Aggregate impairment in value of investments stood at ₹428.53 crore in FY26, including ₹210.39 crore for EESL. - Deferred-tax remeasurement boosted FY26 PAT, while regulatory-accounting judgments spread costs across periods
Minor- PAT increased 3.70% in FY26 mainly on account of the remeasurement of deferred tax balances pursuant to enactment of the Finance Act, 2026 and due to commissioning of new transmission assets. The net movement in Regulatory Deferral Account Balances swung from a positive ₹280.62 crore in FY25 to a negative ₹2,823.61 crore in FY26, driven primarily by the deferred-tax remeasurement. Revenue for transmission projects where final tariff orders are yet to be notified is recognised provisionally as per CERC tariff regulations.
What to watch
- Final dividend. Final dividend of ₹1.25 per share for FY26 is subject to shareholder approval at the AGM; record date 13 August 2026.
- APTEL appeal on pay revision. Hearing date for Appeal No. 236 of 2023 against CERC’s disallowance of the ₹134.16 crore pay revision claim, listed as a Short Matter as of FY26.
- CTUIL stake sale. Completion of the sale of CTUIL to Grid Controller of India Limited, for which in-principle Board approval was granted on 9 March 2026.
- Second-phase SPV mergers. Regulatory approvals for the merger of 28 wholly owned subsidiaries into two entities, approved by the Board on 19 March 2026.
- RINL JV winding-up. Final winding-up of RINL POWERGRID TLT Private Limited, pending Ministry of Power approval sought on 25 August 2025.
Bottom line: This is a cash-generative regulated utility with a clean audit trail and a structural governance gap that has persisted through seven annual reports. The board’s independence deficit is not a one-off lapse but a recurring pattern that has drawn exchange fines and a qualified secretarial audit opinion. The financial exposure sits in the subsidiary and JV layer, where loans to subsidiaries and JVs exist and impairment on the EESL investment has deepened. Watch whether the board composition is remedied, whether the SPV consolidation delivers the intended simplification, and whether the EESL impairment stabilises or grows further.