India's power companies under strain as big users switch to self-generated electricity

India's heaviest power users — steel mills, cement majors and the country's fast-expanding data-centre operators — are increasingly switching to self-generated electricity through rooftop solar, captive combined-cycle plants and long-term private power-purchase agreements. State-controlled grid operators risk losing the high-margin customers they have traditionally relied on to subsidise low household tariffs.

Large industrial groups including Reliance Industries, the Adani Group and Tata Steel have expanded renewable capacity aggressively over the past two years. The trend is running ahead of India's 2030 clean-energy targets but is squeezing the cash flows of NTPC and the state distribution companies.

Rating agencies have warned that without a meaningful tariff overhaul, distribution utilities could face downward pressure on credit ratings. Shares of NTPC and Power Grid have lagged the broader Sensex in recent weeks.