Investor Presentaiton

TATA POWER Distribution - Grid level opportunities TATA Gujarat* Punjab Rajasthan Maharashtra Karnataka* Uttar Pradesh Madhya Pradesh Telangana Andhra Pradesh Tamil Nadu Notes Source: UDAY website, Power Finance Corporation, Ministry of Power report on "State Distribution Utilities- Fifth Annual Integrated Rating" BRIDGE TO INDIA, 2017 Current State: ACS-ARR Gap: 29p/kWh AT&C Loss: 21.8% DISCOM rating A to A+ B to B+ C to C+ Reduction in AT&C losses Percent bonds issued Good Bad Reduction in tariff deficit AT&C Aggregate Technical and Commercial Losses * There is no debt restructuring component for these states. Although the debt has reduced in all cases, but most states have been unable to reduce AT&C losses as well as ACS-ARR gap as per the yearly targets. The full impact of transfer of loans and losses on State Govt. finances will be seen in FY20, Losses which is expected to reduce in FY 19 from the FY 18 levels, is again again expected to balloon in FY 20 to more than the FY 18 levels driven by SAUBHAGYA scheme This will restrict the ability of State Govts. to raise funds for other development objectives and will put huge pressure on them to privatize distribution circles/ adopt franchisee model. Post UDAY, high AT&C losses states would require greater private sector participation 28

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