Power Stocks Slide up to 1.7% Despite Union Cabinet Approving ₹1.86 Lakh Crore PM-DHARA Scheme

Shares of major power generation and transmission companies faced persistent selling pressure in Thursday's trading session, defying positive sentiment around the Union Cabinet's clearance of the ₹1,86,405 crore PM-DHARA (Developing Harmonized and Accelerated Renewable Energy Access) scheme.

The extensive capital program is designed to resolve grid bottleneck challenges and support India's target of scaling non-fossil fuel capacity, yet heavyweights across the public and private power space retreated amid broader market headwinds.

Power Heavyweights Under Intraday Pressure

Leading power sector counters experienced across-the-board declines during morning and afternoon trade:

• Tata Power: Dropped 1.7% to trade at ₹353.95.
• Torrent Power: Declined 1.7% to ₹1,224.
• Adani Power: Slipped 1.6% to ₹200.55.
• Power Grid Corporation of India: Shed 1.4% to ₹256.85.
• NTPC: Fell 1.1% to ₹318.25.
• Vedanta Power: Dipped 1.3% to ₹32.44.
• JSW Energy and Suzlon Energy: Lost 0.8% and 0.7%, respectively.

The decline came as headline indices faced downward pressure, with benchmark equities tracking elevated U.S. bond yields and firm crude oil prices.

Key Pillars of the ₹1.86 Lakh Crore PM-DHARA Outlay

Announced following a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, PM-DHARA is formulated to expand the Intra-State Transmission System (InSTS) and build energy storage reserves to evacuate up to 135 GW of renewable energy across states and Union Territories.

The scheme is scheduled for completion by FY 2032-33 and comprises two main components:

• Green Energy Corridor Phase-III (GEC-III): Earmarked with ₹1,36,378 crore to build 51,126 circuit kilometres of transmission lines and add 2,28,903 megavolt-amperes (MVA) of transformation capacity.
• Battery Energy Storage Systems (BESS): Allocated ₹50,000 crore to deploy 50 gigawatt-hours (GWh) of storage capacity, addressing solar and wind intermittency, transmission congestion, and peak non-solar demand.

To safeguard consumers from sharp tariff hikes arising from state-level grid buildouts, the central government will extend ₹54,082 crore in Central Financial Support. This funding includes ₹45,005 crore for intra-state transmission, ₹6,000 crore in viability gap funding (VGF) for battery storage, and ₹3,050 crore for committed liabilities under earlier corridor phases.

Execution Mechanism and Industry Impact

State Transmission Utilities (STUs) will serve as the principal implementing bodies for the initiative. All greenfield transmission assets under the InSTS segment are mandated to be awarded via Tariff Based Competitive Bidding (TBCB) under the Build-Own-Operate-Maintain (BOOM) model, opening significant commercial bidding pipelines for private and state-backed Transmission Service Providers. Meanwhile, network strengthening and brownfield upgrades will proceed under a Cost Plus Basis (CPB) structure.

Union Minister Ashwini Vaishnaw highlighted that PM-DHARA addresses the structural instability created by weather-dependent clean power, stating, "The primary objective of this project is to develop harmonised and accelerated renewable energy access, essentially creating grid connection points, while designing the grid to accommodate the inherent variability of renewable energy sources".

While equity markets engaged in immediate profit booking, market analysts view the policy clearance as a structural long-term positive for transmission contractors, equipment manufacturers, and green energy generators seeking unobstructed access to regional power grids.

Tags: Tata Power Adani Power Power Grid Corporation of India NTPC BSE Power Index Ministry of Power