Exclusive | EESL transitioning to become a leading consultancy and EPC player; no IPO plans as of now: CEO Vishal Kapoor

Vishal Kapoor is the CEO of EESL

One dark spot for the government-owned Energy Efficiency Services Limited (EESL) is the mammoth amounts due on account of the Street Lighting National Programme. In an exclusive interview to Moneycontrol, EESL’s CEO Vishal Kapoor said municipalities owe the company about Rs 3,300 crore. However, Kapoor pointed out, the company, which has been instrumental in bringing down the cost of LED bulbs by a significant 84 percent from Rs 450 to Rs 70 per bulb under the UJALA scheme, saw its net worth rising from Rs 1,190 crore in FY23 to Rs 1,497 crore in FY24. He said that as part of its strategy to avoid further losses, the government undertaking under the Ministry of Power is changing its corporate strategy from investment mode to consultancy and EPC or engineering, procurement and construction mode.

Edited excerpts:

EESL has been facing financial woes, primarily because of dues that remain to be recovered from urban local bodies for the Street Lighting National Programme (SLNP). In FY23, the company reported a net loss of Rs 277.77 crore, against a loss of Rs 153.32 crore in the previous fiscal. Your comments.

We have changed our accounting practices now to SCA (service concession agreement) accounting as per the master service concessions from the earlier practice of project accounting. What SCA accounting does is that even if you are doing an investment-based project, the revenues from the projects you are investing in will get recognised in the year when you did this project. So, if you actually calculate the books from the past based on this accounting practice, EESL would have made bumper profits in those years because of which those profits have got added into the company’s net worth. If you see EESL’s net worth, it has increased from Rs 1,190 crore in FY23 to Rs 1,497 crore in FY24.

As a matter of company strategy, EESL is now looking at transitioning from investment mode into the trading consultancy and EPC mode, necessitating the change in accounting practice.

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But what about the hundreds of crores of rupees that the urban local bodies are yet to pay? What is the updated amount on that front?

The overall dues pending on the street lighting programme should be somewhere around Rs 3,200-3,300 crore. Last year we had an increase of almost around Rs 150 crore in the receivables. Under the SLNP, the issue was that EESL was bearing the initial costs and the investment was being recouped through monthly or quarterly annuities paid by the municipalities throughout the project duration. The municipalities have not been able to pay up as per the plan. Additionally, EESL ensures the maintenance of the LED streetlights, providing over 95 percent uptime, which significantly enhances public safety and ensures reliable municipal services without burdening local budgets.

We are very proud of the street lighting programme because we championed it like the LED bulb revolution that EESL brought in. As of January 6, 2025, EESL has successfully installed over 1.34 crore LED streetlights across urban local bodies and gram panchayats, leading to significant energy savings of over 9,001 million units (MUs) of electricity annually and a reduction in peak demand by more than 1,500 MW.

Now we have decided to go only for EPC-based street lighting projects. We have bagged a project worth at least Rs 800 crore from Bihar for solar street lighting across the state.

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Does EESL plan to go for an IPO or is there any such plan for CESL or any of your other subsidiaries?

No, not really. CESL (Convergence Energy Services Limited, the EESL arm with a solar energy focus) is doing really well now. It has turned profitable. But there is no plan for an IPO for CESL or EESL or any of our subsidiaries as of now or in the near future.

There were reports of EESL wanting to sell its 49 percent stake in IntelliSmart Infrastructure Private Limited, a joint venture with National Investment and Infrastructure Fund for smart meters. Your comments.

Yes, we are looking at it because we believe that the investments that we have made in IntelliSmart have borne a positive outcome. We went into smart metering way back in 2017-18 in a big way. The company has now grown big and has bagged a lot of orders. So we do believe that there is enough value that lies in IntelliSmart. However, as of now, I cannot put a number to the value we might be expecting.

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What are your expectations from the Union budget 2025? Anything that we can expect on energy efficiency or for the electric vehicle (EV) infrastructure?

As a government company, it would not be appropriate for me to comment on the upcoming budget at this moment.

EESL in February, 2024 launched an e-commerce platform for energy-efficient services and products. How has it been doing?

We have been consistently increasing our customer base. We have around 22,000 customers on the portal. When we started, it was one order every three days or so. Now, it is about 15 orders every day, which we believe is good growth. We are working on increasing the scope of the portal as well.