Demand Notice of Rs. 12,88,27,935 Received from HESCOM Karnataka Over Cross-Subsidy Charges

Demand notice from HESCOM (Mahalingpur, Karnataka) for cross-subsidy charges on open access power imported between 2013 and 2016.

Sat 26 Sep 2026

Demand Amount

Rs. 12,88,27,935

Principal Amount

Rs. 5,90,95,383

Interest Amount

Rs. 6,97,32,552

Period in Question

2013 to 2016

Contingent Liability Recorded

Rs. 5,90,95,383

What happened

The company disclosed that it has received a demand notice from the Assistant Executive Engineer (E) O & M Sub Division, HESCOM, Mahalingpur, Karnataka.

• The demand relates to cross-subsidy charges on open access power imported between 2013 and 2016.
• Communication was received on September 25, 2026.

The amounts demanded

• Principal amount: Rs. 5,90,95,383
• Interest: Rs. 6,97,32,552
• Total including principal and interest: Rs. 12,88,27,935

Notably, the interest component is larger than the principal, reflecting the age of the period in question.

How the company has treated it

The company has considered Rs. 5,90,95,383 as a contingent liability. A contingent liability is a possible obligation that is disclosed but not recorded as an expense until it becomes probable. The company states it is assessing the further impact and will take appropriate actions in due course with the authority.

What it means in simple terms

Open access allows a large consumer to buy power from a source other than the local distribution utility. When it does so, the utility can levy cross-subsidy surcharges to compensate for the revenue it loses. Here the utility is claiming such charges for a past period, along with interest.

For investors, the relevant point is the size of the claim relative to the company's finances and the fact that the outcome is not yet settled — the company has said it is still assessing the matter and engaging with the authority.

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