India’s power distribution landscape is heading toward a structural shift as the government prepares to table the Electricity Amendment Bill, 2025, in the upcoming Budget Session. The Bill aims to move power distribution away from monopoly control toward regulated competition, allowing multiple public and private discoms to operate in the same area using shared network infrastructure, similar to the transmission model.

The reform focuses on cost-reflective tariffs, uniform wheeling charges, and stronger regulatory enforcement. State regulators will be empowered to determine tariffs suo moto if discoms delay filings, reducing the build-up of unpaid regulatory assets. Cross-subsidies are proposed to be phased out within five years, while Renewable Purchase Obligations will continue with penalties for non-compliance.

The changes matter because distribution remains the weakest link in India’s power sector, plagued by high AT&C losses, weak billing efficiency, and politically distorted tariffs. The proposed framework is designed to improve efficiency, restore financial viability, and gradually introduce consumer choice.

Utility stocks with meaningful exposure to transmission and distribution are most sensitive to these reforms. Tata Power stands to benefit due to its large T&D contribution of nearly 60 percent of FY25 revenue, strong urban footprint, and advanced smart grid capabilities. The company continues to expand its transmission network and clean energy capacity, with analysts remaining constructive on its long-term reform-led opportunity despite near-term volatility.

Torrent Power is another key beneficiary given its distribution-heavy business model and industry-leading T&D losses of just 2.3 percent. The company’s strong operational efficiency, planned investments across the energy value chain, and focus on merchant power and green hydrogen position it well in a performance-driven, competitive regime.

CESC, with its strong presence in eastern India and historically monopoly distribution areas, faces a more mixed outlook. While competition and regulatory scrutiny may increase, investors continue to track its stable profitability, dividend yield, and resilience in urban distribution.

Overall, the Bill signals a long-term positive shift for transmission and distribution companies as India prepares for rising power demand, grid expansion, and greater energy security. The key risk remains uneven implementation at the state level, given power’s concurrent status under the Constitution.