Smart Metering Industry
Smart Metering industry has come in limelight in recent years since Government of India has pledged to replace 250 million conventional meters with smart meters. Well, Smart metres have several advantages over traditional meters, including the ability to remotely turn on and off power, communicate with data management systems, are tamper proof, optimise grid load, reduce power demand during peak hours, allow consumers to track their consumption, voltage quality is maintained throughout, and they can communicate via wired or non-wired technologies such as LAN, DSL, or Zigbee, wifi, or cellula.
In past years smart meter market grew by 107% during the period 2016-2021 and it is projected to grow to US\$3,267.7 million by 2031, with a CAGR of 34.57% from 2023 to 2031. Over 5 million smart meters were planned to be installed by 2024, a staggering 250% increase from the number of units in 2022. The smart meters market in India will include almost 40% of smart meter installations that are directly connected with decentralized renewable energy sources by 2025 and Electric smart meters dominate the Indian market, making up 58% of the total. The drive for increased urbanization and industry in India has driven up demand for power. Along with that the initiatives from the public sector, such as the Energy Efficiency Services Limited (EESL), have aided in the spread of energy smart meters.
Different state governments and their respective DISCOMs have committed to installing smart meters for customers whose monthly usage levels exceed 200 units under the Ujwal DISCOM Assurance Yojana (UDAY) program. Market share of smart meters installed across India is as shown below:
Figure 1 source: Statista data 2023
Smart Metering industry can be categorized into three types which are:
- Smart Electric Meter
- Smart Gas Meter
- Smart Water Meter
Market share of smart meters according to its types is as shown below:
There are many companies which have started contributing towards the ambitious plans of GOI for increasing efficiency and reducing theft due to human interactions. Reliance Industries Ltd (RIL) plans to leverage its Jio business to offer meter data collection, communication cards, telecom, and cloud hosting services to discoms. Similarly, Airtel Business enters strategic partnership with IntelliSmart for powering up to 20 million smart meters across India.
Other Companies which offer Smart Metering Solutions to various discoms are as follows:
- Adani Energy Solutions (CMP : 1,025 | M.Cap : Rs. 113,757cr.)
Adani Energy Solutions has also paved its path in Smart Metering Industry and it has formed a joint venture with Esyasoft Holdings to implement smart metering projects in India and other countries. The joint venture will bid for global orders and serve Indian discoms, Scottish Gas, and UAE-based utilities. The company's own distribution arm Adani Electricity Mumbai has already installed a majority of its 7 lakh smart metres planned in phase 1. It has an order book of about two crore smart meters from power distributing companies like BEST Mumbai (10.8 lakh), Maharashtra discom (1.15 crore), Uttarakhand (6.5 lakh), Andhra Pradesh (41.2 lakh), Bihar (28.4 lakh) and Assam (7.8 lakh) and more are likely to get added. Following this orders Adani Group may emerge as the largest smart meter supplier in the country, commanding a 30% share of the market.
- Schneider Electric Infrastructure Ltd. (CMP : 404| M.Cap : Rs. 9,640 cr.)
Schneider Electric, a French company which specializes in energy management and digital automation, has a manufacturing facility in Mysuru, Karnataka has showcased its commitment in supporting India's Smart Meter National Programme (SMNP). The company offers a smart metering solution called EcoStruxure which are a good option for businesses and homes that want to monitor how much energy they consume and how it's used. Schneider Electric is also working on increasing the localization of components for electricity meters in India and it is currently implementing orders for 1.4 million smart electricity meters in India.
- Power Grid Corp (CMP: 237.45| M.Cap: Rs. 222,377 cr.)
India's largest power transmission utility company Power Grid Corp of India has also entered the space of Smart metering industry. It has received board approvals for the implementation of advanced metering infra projects worth Rs 4,067.3 crore and revised investment proposal for establishment of a pilot data centre at Manesar substation at cost of Rs 713.83 crore. The company has also taken projects for the installation of smart meters for state utilities and also begun procurement process for smart metering solution for 10 million smart meters.
- Tata Power (CMP: 329 | M.Cap: Rs. 105,574 Cr.)
Tata Power is another leading company in Smart Metering solution space. Company has already installed One lac+ Smart Meters in Mumbai. It will also install smart meters for all its 7.5 Lacs Consumers in Mumbai by FY25. The company is currently serving more than 12 million consumers via its Discoms, under a public-private partnership model viz Tata Power Delhi Distribution Ltd. with the Government of Delhi in North Delhi, TP Northern Odisha Distribution Limited, TP Central Odisha Distribution Limited, TP Western Odisha Distribution Limited, and TP Southern Odisha Distribution Limited with the Government of Odisha. Till March 2023, it had already installed 5.1+ lakh smart meters across Delhi, Mumbai, and Odisha. The company has also bagged order worth Rs 1744 Crore to implement Smart metering project in Chhattisgarh State Power Distribution Company Limited. Tata Power plans to invest about Rs 120 bn in FY24 as part of its capex plan across segments.
- Genus Power ( CMP: 230 | M.Cap: Rs. 5,903 Cr.)
Genus Power Infrastructures Ltd. is a leading smart meter manufacturer in India. In 2020, Genus Power became the first Indian company to supply 1.5 million smart meters to the Energy Efficiency Services Limited (EESL) of India. Company has already captured approximately 27% of the market share. Its wholly-owned subsidiary recently won a smart meter order worth ₹3,121.42 crore with this the company's total order book stands at more than ₹17,000 crore.Singapore’s sovereign wealth fund GIC is setting up a $2 billion platform with listed smart meters manufacturer Genus Power Infrastructures Ltd, which will make it the biggest such platform in the smart meters space in India. GIC will also be investing$63 million or Rs519 crore into Genus Power.
- HPL Electric & Power ( CMP: 233 | M.Cap: Rs. 1,507 Cr. )
HPL Electric & Power has a substantial market share of around 20% in the domestic meters market with an installed capacity of 11 million units per year.
Company has already acquired smart meter orders worth Rs 9 bn which adds to the company's total order pipeline of over Rs 22.5 bn. Recently the company has bagged an additional smart meter orders worth Rs 20.4 billion from customers with a pan-India presence. Its strong presence in this segment positions it well to capitalise on the growing demand for smart meters.
- GMR power (CMP : 54.75 | M.Cap: Rs. 3,304 Cr.)
GMR Power has also stepped into Smart Metering business through its subsidiary GMR Smart Electric Distribution Pvt. Ltd.. The company has already bagged a prestigious order worth Rs.7,593 crores to implement a large-scale smart metering project under the RDSS program- a timeline-based reforms plan initiated by the Ministry of Power, Government of India. The order entails 75.69 lakh prepaid smart meters across two discoms Dakshinanchal Vidyut Vitran Nigam Limited (DVVNL) and Purvanchal Vidyut Vitaran Nigam Limited (PuVVNL), making it the largest combined package order of its kind which will span 22 districts covering prominent areas such as Varanasi, Prayag Raj, Agra, Mathura, and Aligarh among others. The company has also received Letter of Intent (LOA) for a smart metering project worth of Rs 2,470 crore from Dakshinanchal Vidyut Vitran Nigam Limited. GMR has also signed an MoU with the Uttar Pradesh Government for a total outlay of Rs 45,000 crore by 2028 to invest in several sectors, such as solar, energy efficiency, EV charging infrastructure, Green Hydrogen plants, data centres, and more.
- L&T (CMP : 3521 | M.Cap : Rs. 494,540 Cr. )
When it comes to technology advancement in any industry India’s largest EPC company remains remains away from it, L&T has also stepped into Smart Metering industry and it supplies smart meters to the government under its subsidiary L&T Smart World which is one of India's largest smart meters deployers, with over 5 million units across eight Dis-Coms. L&T’s another division, L&T Electrical & Automation (E&A) offers a range of smart metering solutions, including prepayment options. L&T and EESL have already successfully implemented the advanced metering infrastructure (AMI) system for more than 5,00,000 smart meters including integration and commissioning of 50,000 smart meters for NDMC.
- Torrent Power : CMP : 920 | M.Cap : Rs. 44,178 Cr. )
Torrent Power Limited (TPL) is a power utility company in India that plans to install smart meters before making any new connections by 2025 to reduce losses and theft and enhance smart distribution with the help of Smart Metering.
Smart metering currently is widely adaptive in Electric segment but in future there are very high chances for growth in segments of Gas and Water supply due to increase in infrastructural development and housing development backed by affordable housing projects by the governments of different states. So, we can say that Smart Metering is going to become a very big industry and currently there are limited players in this industry due to which there are very high chances for above companies to enjoy heavy flow of orders in upcoming years from various discoms and private players. Considering these investors looking for fresh investments in futuristic and growing sector can consider Smart Metering industry and above-mentioned companies for long term perspective.
Analyst : Het Zaveri
info@smartinvestment.in
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