Where is India on Smart Metering

Industrial Update – Newsletter – Feb 2023: IMAP’s Industrials group brings you this monthly update with a focus on latest news, transactions and interesting snippets from the Industrials domain in India

Where is India on Smart Metering

Smart meter is an electronic device that measures and records energy usage (so helps identify leakages) and communicates with utilities in real-time for billing and management purposes.

The Central Govt. launched the Smart Meter National Programme (SMNP) with a target to install 250 million smart meters by 2022. Under the SMNP, Energy Efficiency Services Limited (EESL, a public sector company under the Ministry of Power) works with utilities to install smart meters with a cost-plus approach, whereby all Capex / Opex is done by EESL and the states / utilities pay over time basis the savings made.  The other programs for smart metering include Integrated Power Development Scheme (IPDS), the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and the Prime Minister’s Development Package (PMDP)-2015. Smart meters are also being installed directly by the utilities. Despite the various initiatives, only around 5.5 million smart meters have been installed so far.

Smart metering expected to now accelerate with the launch of the Revamped Distribution Sector Scheme (RDSS) in July’21. RDSS, with an aggregate outlay of about Rs.3 lakh crore (~US$ 40 bn.) over a period of 5 years from FY’22 to FY’26, aims to enable DISCOMs to undertake reforms and strengthen the overall distribution efficiency. Metering is one of the key areas of focus under RDSS in addition to reduction of transmission and distribution losses (AT&C losses) on pan-India level to 12-15% by 2024-25.

Under the RDSS, the govt. has prioritized smart metering for 500 cities, UTs, Industrial & Commercial customers and Govt. Offices. Smart metering under RDSS is to be implemented through PPP on TOTEX (CAPEX+OPEX) model and is providing grants and incentives for the installation.

The companies expected to benefit include vendors (of smart meters) approved by EESL – Secure Meters, Genus, L&T, HPL, QuadGen, ITI and Landis+Gyr. In addition, infrastructure players including L&T, GMR, Tata Power etc. are also expected to participate in the rollout of smart meters

Some recent transactions

Feb’23	Neelachal Ispat Nigam	Tata steel invested ₹300 Cr. for a 3.35% stake in the company.
Feb’23	IAC International Automotive India	Lumax Auto technologies acquired 75% of the company for ₹587 Cr.
Feb’23	Excel Controlinkage	Greeves Cotton acquired 100 % of the business for ₹385 Cr.
Feb’23	Azad Engineering (Machined comps for aerospace & energy)	₹240 Cr fundraise from Piramal Alternatives
Feb’23	Freightify	₹98 Cr fund-raise led by Sequoia, Nordic Eye VC & others
Jan’23	Tufropes	Aimia Inc. acquired 100% of the business for ₹1522 Cr.

Recent News

• India discovered 5.9 million tonnes of lithium reserves (amounting to 5.7% of global reserves of lithium) in the Reasi district of J&K. The find has major strategic implications as it could boost battery manufacturing for EVs (where lithium is a key element)
• Manufacturing PMI in Jan’23 was at 55.4 (compared to 57.8 in Dec’22); PMI value above 50 indicates growth. Despite some loss of growth momentum, India expected to be in expansion mode in Q4’23
• Ola Electric will be investing about Rs 7,600 crore ($918 m) to set up a EV hub in Krishnagiri and Dharmapuri districts of Tamil Nadu which will include advanced cell and EV manufacturing faculties, vendor & supplier parks and an ancillary ecosystem for EVs
• The benchmark gas price in Europe fell below €50 per MW-hour first time in 18 months; prices had exceeded €300/MWh in Aug’22

IMAP Industrials Index & Valuation of sub-segments

Commodity Prices Index