Power Grid Corporation of India Limited (POWERGRID), a key player in the Indian power sector, has recently found itself in regulatory hot water. The company has been slapped with fines totaling Rs 10.86 lakh by the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) for non-compliance with board composition requirements.

The Non-Compliance Issue

The notices, received on November 28, cite POWERGRID's failure to adhere to Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This regulation pertains to the composition of the company's board of directors for the quarter ended September 30.

Financial Implications

Each stock exchange has imposed a fine of Rs 5,42,800 (including GST), amounting to a total penalty of Rs 10,85,600 for POWERGRID.

POWERGRID's Response

POWERGRID, being a Government Company under Section 2(45) of the Companies Act, 2013, has stated that the power to appoint directors rests with the President of India. The company has taken the following steps:

1. Approached the Ministry of Power to fill vacant Independent Director positions.
2. Requested both BSE and NSE to waive the imposed fines.

Financial Performance Amid Regulatory Challenges

Despite the regulatory hiccup, POWERGRID's financial position remains robust. The company's latest balance sheet data reveals:

The company has shown growth in total assets and equity, indicating overall financial health despite the regulatory challenges.

Looking Ahead

As POWERGRID navigates this regulatory hurdle, investors and market watchers will be keen to see how quickly the company can resolve its board composition issues and whether the stock exchanges will consider its waiver request. The outcome of this situation could have implications for other government-owned entities listed on Indian stock exchanges.

This incident underscores the importance of maintaining regulatory compliance, even for government-controlled entities, in India's evolving corporate governance landscape.

Power Grid Corporation of India Limited (POWERGRID) has taken a significant step towards enhancing cross-border power transmission infrastructure by entering into Joint Venture and Shareholders Agreements (JV&SHA) with Nepal Electricity Authority (NEA) on October 29, 2025. This strategic partnership aims to develop high-capacity power transmission links between India and Nepal, marking a crucial milestone in regional energy cooperation.

Key Highlights of the Partnership

• Joint Venture Companies: Two Joint Venture Companies (JVCs) will be formed, one in India and one in Nepal.
• Transmission Projects:
  1. 400kV Double Circuit Inaruwa (Nepal) - New Purnea (India) Transmission Link
  2. 400kV Double Circuit Lamki (Dododhara) (Nepal) - Bareilly (India) Transmission Link
• Equity Structure:
  • Indian JVC: POWERGRID (51%), NEA (49%)
  • Nepalese JVC: POWERGRID (49%), NEA (51%)

Strategic Implications

This partnership represents a significant step towards strengthening energy ties between India and Nepal. The high-capacity cross-border transmission infrastructure will facilitate efficient power exchange between the two countries, potentially leading to improved energy security and economic benefits for both nations.

Financial Context

To provide context for POWERGRID's financial capacity to undertake this venture, here's a snapshot of the company's key financial metrics based on the latest available data:

POWERGRID's strong financial position, evidenced by its growing asset base and equity, suggests that the company is well-positioned to undertake this significant cross-border infrastructure project. The substantial increase in investments (21.12% year-over-year) also indicates the company's strategic focus on expanding its portfolio and capabilities.

Conclusion

The joint venture between POWERGRID and Nepal Electricity Authority represents a landmark development in South Asian energy cooperation. As this project progresses, it will be crucial to monitor its impact on regional power dynamics, economic growth, and energy security in both India and Nepal.