GMR’s smart meter arm looking to raise $100-150 million

GMR’s smart meter arm looking to raise $100-150 million

GMR Smart Electricity Distribution Pvt Ltd, a subsidiary of GMR Power and Urban Infra Limited, a smart meter company, is looking to raise around $100-150 million to fund smart meter rollouts the company has won and to bid for new tenders, sources aware of the development told Moneycontrol.

Last year, the smart meter arm of GMR won an order worth Rs 7,593 crore to implement a large-scale smart metering project under the DBFOOT (Design, Build, Finance, Own, Operate, and Transfer) model. The order entails the installation of 75.69 lakh prepaid smart meters across two discoms — Dakshinanchal Vidyut Vitran Nigam Limited and Purvanchal Vidyut Vitaran Nigam Limited — making it the largest combined order of its kind.

The scope of the project encompasses the design, supply, installation, commissioning, operation, and maintenance of prepaid smart meters in consumer premises, as well as  execution at the network level, including distribution transformers and feeders, for a period of 10 years. The project will span 22 districts, covering prominent areas such as Varanasi, Prayagraj, Agra, Mathura, and Aligarh, among others.

“The company is working with a couple of investment banks to find investors to infuse capital of around $100-150 million, that will help it in scaling up the business,” said one of the sources.

“The smart meters space has emerged as an interesting opportunity for investors, given the Indian government’s push to install 250 million smart meters by 2026. The rollout of the programme is running behind schedule, thus, more state utilities are expected to come up with more smart meter concessions in the near term to meet the government targets,” the source added.

The smart meter market is estimated to be a $30 billion opportunity, the source said.

The smart meter programme aims to help turn around the power distribution sector by eliminating billing and collection losses, thereby enhancing the financial sustainability of the power discoms.

Also Read: Smart meter play triggers smart rally in select power stocks

Smart meters communicate on a real-time basis with distribution companies, enabling remote meter reading and quick identification of network failures, reducing response times, and improving the quality of networks and services. Smart meters also help end-consumers lower their energy bills with real-time access to consumption data.

While the sector is seeing interest from investors, the source added that the short concession period of 10 years is a deterrent for many investors.

An email sent to the GMR group did not elicit a response.

In July 2023, the sector saw its biggest deal when Singapore’s sovereign wealth fund GIC announced that it will invest $2 billion in a joint venture (JV) with listed smart meter manufacturer Genus Power Infrastructures Ltd.

GIC will hold a majority stake of 74 percent in the JV, while Genus will hold the remaining 26 percent. The venture has an exclusive supply contract with Genus for the supply of  smart meters.

Genus Power, founded in 1995, is among the largest players in India’s electricity metering solutions industry. The company has manufacturing plants across Jaipur, Haridwar, and Guwahati with a total installed capacity of over 10 million meters.

In 2019, India’s quasi-sovereign National Investment and Infrastructure Fund and state-owned Energy Efficiency Services Limited set up a joint venture, IntelliSmart Infrastructure Private Limited, to implement, finance and operate the smart meter rollout programme of power distribution companies.