Maharashtra State Electricity Distribution Company Limited (Mahavitaran), the country’s largest power distribution utility, has repaid a loan of Rs 12,800 crore taken from the State Bank of India (SBI) in a single instalment ahead of schedule, marking a significant step toward strengthening its financial position.
Mahavitaran Chairman and Managing Director Lokesh Chandra said the prepayment was made through a combination of a fresh low-interest loan from another financial institution and the company’s own internal resources. The move has resulted in substantial savings on interest costs and reduced the utility’s overall debt burden.
The development follows directions from Chief Minister Devendra Fadnavis to improve Mahavitaran’s financial health and make the utility more resilient. In line with this vision, the company has undertaken a series of measures aimed at rationalising debt and improving liquidity.
Prepayment was made through a combination of a fresh low-interest loan
Mahavitaran had raised the Rs 12,800 crore loan from SBI in phases, at interest rates ranging between 8.65 per cent and 9.25 per cent. Of this, Rs 7,100 crore was refinanced by raising an equivalent loan from another financial institution at a lower interest rate of 8.25 per cent. The remaining Rs 5,634 crore was repaid directly from Mahavitaran’s own funds, further easing pressure on its balance sheet.
At the time of availing the SBI loans, Mahavitaran had pledged revenue from 10 of its operational circles as collateral. These circles together generate an annual revenue of around Rs 30,000 crore. With the full repayment of SBI’s dues, this revenue stream has now been released from collateral obligations.
According to the company, the unencumbered revenue base will enable Mahavitaran to raise loans of up to Rs 50,000 crore in the future at comparatively moderate interest rates, providing greater financial flexibility.
The one-time prepayment of such a large loan is also expected to enhance Mahavitaran’s creditworthiness in the financial market. It is likely to boost investor confidence and strengthen the company’s prospects for raising funds through private or public bond issues. The improved financial profile is also seen as an important milestone if Mahavitaran pursues a stock market listing in the future.
