CESC Share price and Fundamental Analysis

Company History

CESC Limited is a flagship company of the RP-Sanjiv Goenka Group. The Company is an integrated power utility ever since 1899, engaged in the generation and distribution of electricity across 567 square kilometres of its licensed area in Kolkata, Howrah, Hooghly, North and South 24 Parganas in West Bengal and supplying safe, cost effective and reliable electricity to its 3.5 Million customers. The Company is primarily engaged in generation and distribution of electricity. Besides this, it is also running a single retail store in state of Gujarat. Presently, it has three generating stations at Budge Budge, Southern and Titagarh, with a cumulative capacity of 1,125 MW.

Through its subsidiary, Noida Power Company Ltd, it distribute power in Greater Noida, Uttar Pradesh with a license area of 335 sq. km. Apart from this, it also operate three Distribution Franchisee (DF) in Rajasthan: Kota, Bharatpur and Bikaner. Outside of the Kolkata operations, Company presently own & operate two thermal power power in licensed area generating 885 MW of power. These are Budge Budge Generating Station (750 MW) and Southern Generating Station (135 MW) within its licensed area.

CESC Ltd was incorporated on March 28, 1978 with the name The Calcutta Electric Supply Corporation (India) Ltd. In the year 1983, the company commissioned the Titagarh generating station, with a capacity of 240 MW, which marked the beginning of a new approach to solve the state's power shortage. In January 1, 1987, the company changed their name to CESC Ltd.

In the year 1988, the company signed a Memorandum of Understanding (MoU) with the Consultancy & Contracts Division of Neyveli Lignite Corporation for cabling work. A MoU was signed between the Consultancy & Contracts Division and MECON; a public sector consultancy firm to jointly undertake consultancy and construction contracts in power and engineering field both in and outside the India. The 135MW Southern Generating Station was completed in the shortest possible time. The first unit commenced supply in September of the year 1990, followed by the second unit in May of the year 1991. In the year 1991, the company received all statutory clearances for the 500 MW power stations at Budge.

In the year 1995, the company promoted a new company under the name of Integrated Coal Mining Pvt Ltd to undertake the work particularly for power companies to be directly involved in mining. In the year 1996, the company had endorsed a new company namely Balagarh Power Company Ltd, for setting up a 1500 MW thermal power station. In the year 1997, The Sunday Times of India gave the highest rating to CESC's Calcutta - 10 out of 10 on the power position, when compared to other metropolitan cities of India. Budge Budge's boiler of the first unit was lighted up on March 30, 1997. The second unit was synchronized on March 6, 1999.

In the year 2001, the company's Titagarh Thermal Power Station was awarded the ISO 9002 certification. In the year 2003, Chemithon Engineers Ltd along with Heavy Water Board of the Government started work on development of a process to bring down emission levels at the company. Also, the company unveiled multi-pronged scheme to curb pollution at its thermal power facilities.

In the year 2004, Hindustan Lever Ltd made a tie up with the company for sampling of Pepsodent toothpaste. Also, the company made an alliance with PTC. In the year 2005, the company made a tie up with Power Finance Corporation Ltd (PFC) to repay debt and signed a MoU with Government of Jharkhand. In March 21, 2007, the company was awarded a Bronze shield for the outstanding performance of their Budge Budge station amongst all coal and lignite fired power stations in India.

During the year 2007-08, Spencer's Retail Limited (SRL), a well established company engaged in the business of operating and managing a large chain of retail stores across India with ambitious growth plans for the future, became a subsidiary company with effect from April 1, 2007 with the company's holding being 94.7% in SRL.

During the year 2008-09, the company's Budge Budge Generating Station won the Green Tech Foundation 'Environment Excellence Gold Award'. In February 2010, the third unit of 250 MW at Budge Budge Generating Station was commissioned, together with an associated power evacuation system comprising 89 km of 220 kV double circuit transmission lines. Simultaneously, the 220 kV Eastern Metropolitan Substation with three 160 MVA, 220/132/33 kV transformers was also commissioned.

During the year 2010-11, the company formed two subsidiaries, namely Bantal Singapore Pte Ltd and CESC Projects Pvt Ltd. The plant capacity at the Southern Receiving Station was augmented by replacing the existing 55 MVA 132/33 kV transformer with a 75 MVA transformer. They commissioned on new distribution station and the plant capacities at eight other were increased.

In 2012, the company has entered into agreements for taking over from Indiabulls Group two hydroelectric power projects of an aggregate capacity of 146 MW in the state of Arunachal Pradesh.For the aforesaid purpose; the company has acquired entire shares of Pachi Hydro Power Projects Limited and Papu Hydropower Projects Limited. RPG Group bought Firstsource solutions there by marking a foothold in IT space.

In 2013, the company executed the first 300 MW Thermal Power Unit of 2 X 300 MW project at Chandrapur. Maharashtra by Dhariwal Infrastructure Limited

In 2014, the company was awarded, Top Infrastructure Company Award under 'Power Distribution' Category by Dun & Bradstreet Infra Awards 2014. The company also won Asian Power Awards 2014 in the category of Innovative Power Technology of the Year.

In 2015, the company signs MoU with Silver Spring for smart grid business. The company won the rights to operate the Pune franchise of the Indian Premier League for a period of two years. The company also launches Mobile App for consumers' convenience.

On 20 May 2016, CESC announced that the company has won the bids floated by Jaipur Vidyut Vitaran Nigam Limited (JVVNL) and have been appointed by JVVNL as distribution franchisees for the cities of Kota and Bharatpur in the state of Rajasthan for distribution and supply of electricity for a term of twenty years each. The Solar Power Project, commissioned in January 2016 at Ramnathapuram, Tamil Nadu, was undertaken through Crescent Power Limited, a subsidiary of CESC.

On 6 Feb 2017, CESC announced that the company has emerged as the winner of a bid floated by Jodhpur Vidyut Vitran Nigam Limited (JdVVNL) and has been appointed by JdVVNL as the electricity distribution franchisee for the city of Bikaner in the state of Rajasthan for a term of twenty years.

In 2017-18, 50,000 installations were carried out to redesign the Service Cut Out and install Moulded Case Circuit Breaker (MCCB) and Miniature Circuit Breaker (MCB) in meter boards. In FY'18-19, to increase the Company's capabilities in servicing the growing energy demand in a space-starved city such as Kolkata, CESC deployed state-of-the-art technologies to convert existing Extra High Voltage (EHV) outdoor substations to indoor GIS substations , with space consolidation for future capacity augmentation and up-gradation to 220 kV. During 2017-18, CESC installed 900 Automatic Power Factor Controllers (APFC) at the secondary (400V) side of distribution transformers (DTs) for improving supply voltages and relieving them. It also installed AMR meters for remote metering of its HT consumers, LT consumers and distribution transformers. By the end of 2017-18, 35,376 AMR meters were installed, including 14,700 for street lighting and 8,254 for DTRs.

The Composite Scheme of Arrangement under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, amongst the Company and nine other companies and their respective shareholders has been made effective from 1st October, 2017 by the Hon'ble National Company Law Tribunal, Kolkata bench (NCLT), subject to the terms and conditions mentioned in NCLT's Order dated 28 March 2018, except for the demerger of the Generation Undertaking of CESC Limited into Haldia Energy Limited, a wholly owned subsidiary of CESC Limited (the said Demerger). However, the said Demerger proposal has been withdrawn with effect from 14 November 2019 and Haldia Energy Ltd continues to be a wholly owned subsidiary of the Company.

During 2019-20, about 1.4 lakh meters were installed on account of new supplies and replacements. CESC provided around 88,000 new connections in 2019-20. During this year, it launched RBL Bank as an additional payment gateway and introduced provision to pay bills for new connections through NEFT/RTGS. In November 2019, DIL had secured a power purchase agreement for 185 MW with MAHAGENCO, which in turn supplies to MSEDCL. Under this agreement, which was valid up to March 31, 2022, power was supplied from Unit I. During the year 2019-20, the Asansol, West Bengal plant generated 195 million units (MU) of power.

In January 2019, CESC had won the bid floated by Maharashtra State Electricity Distribution Company Limited (MSEDCL) for a 20-year appointment as a DF for Malegaon Corporation Area under Malegaon Circle of MSEDCL, which commenced operations in 2019-20.

As on 31 March 2020, the Company had eighteen subsidiaries including Eminent Electricity Distribution Limited which became a subsidiary of the Company during the financial year under review.

As on March 31, 2021, the Company had nineteen subsidiaries including Noida Power Company Limited which became a subsidiary of the Company during the financial year 2020-21. The Company had, voluntarily delisted its equity shares from The Calcutta Stock Exchange Limited with effect from November 23, 2020.

In 2020-21, 15,000 and 2,300 saplings were planted at HEL and BBGS respectively, taking total tree plantation at both plants to over one lakh each. HEL has earned the distinction of having over 30% of the plant area under green cover. During 2020-21, about 1.06 lakh meters were installed on account of new supplies and replacements. CESC provided around 67,000 new connections in 2020-21.

As on March 31, 2022, the Company had eighteen subsidiaries. During the year 2022, Surya Vidyut Limited (SVL) ceased to be a subsidiary of the Company consequent to sale of SVL's shares to Torrent Power Limited in terms of Share Purchase Agreement executed with them.

In 2021-22, distribution infrastructure of 1.5 lakh meters were installed on account of new supplies and replacements, of which over 97,000 were new connections by CESC. The average time taken to provide a new connection was 1-2 days. Around 2,875 smart meters were installed in 2021-22. CESC had installed a 315 kWh Battery Energy Storage System (BESS) in 2020-21 to address frequency regulation, future solar intermittency planning, peak power shaving and supply voltage improvement.

During the year 2021-22, Company sold its wind power portfolio to Torrent Power Limited through transfer of its entire shareholding in SVL on March 11, 2022. In February 2022, Dhariwal Infrastructure Limited (DIL) signed a medium term PPA for supply of 210 MW to Railway Energy Management Company Limited in Maharashtra for a period of 3 years. In 2021-22, the company added 7,112 new connections and exchanged another 11,272 meters.

During the year 2022-23, the Company commissioned supply of 3 MVA power to Fort Gloster Industries Limited by commissioning of 33 kV feeders and 3-Panel 33 kV SBB GIS at consumer's switchroom. 67 Nos Distribution Transformers (DTs) aggregating 29.81 MVA were added taking installed base to 8786 DTs and 3024 MVA; commissioned 33kV feeders to provide supply to Joka Receiving Substation of Joka-BBD Bag Metro Corridor of Kolkata Metro; Lengths of lines added at different voltage levels were 11.843 ckm at 33 kV, 42.983 ckm at 11 & 6 kV and 129.362 ckm of LT lines.

In 2023, two Electric cars were introduced at the Haldia plant. Synchronisation of CESC's system upgraded from 132kV to 220kV, micro-grid at Chakmir substation with 100 kWp Floating Solar PV Plant and 218kWh Battery Energy Storage System (BESS) commissioned in 2022-23. The PWD Division of Chandrapur, Government of Maharashtra, completed construction of a 500 metre M-40 grade concrete road using bottom ash from DIL for partial substitution of natural sand. In 2022-23, the Company commissioned a New Data Centre to augment its IT servicing capabilities. A latest backup solution was introduced to reduce the risk of data loss in case of emergencies. It finalised Business Continuity Plan (BCP) architecture towards enhancement of the disaster and recovery posture of its systems and applications. A state-of-the-art 24x7 Security Operations Centre (SOC) was commissioned. It installed solar rooftops to the tune of 228 kW at its substations and generating stations. At Prinsep Street Substation, a roof top wind turbine of 5.1 kWp was installed with grid connection. Solar panels installed for BBGS Gate complex building. At BBGS, 2 kW solar panels installed for running the air to water project in the canteen.

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