Petition of the CERC (Procedure, Terms and Conditions for grant of trading licence and other related matters) Regulations of a Category V Inter- State Trading Licence – EQ

Summary:

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### Detailed Analysis of the CERC Order

#### 1. Background and Parties Involved
– **Petitioner:** Greensure Trading Private Limited (GTPL), incorporated on December 1, 2025, under the Companies Act, 2013.
– **Respondent/Regulator:** Central Electricity Regulatory Commission (CERC).
– **Petition Subject:** Application under Section 14 of the Electricity Act, 2003, read with Regulation 6 of the CERC (Procedure, Terms and Conditions for grant of trading licence and other related matters) Regulations, 2020, seeking a Category ‘V’ inter-state trading licence.
– **Representation:** The Petitioner was represented by Advocate Shri Hemant Singh.

#### 2. Regulatory Framework (Trading Licence Regulations, 2020)
The application was evaluated under the **CERC (Procedure, Terms and Conditions for the Grant of Trading Licence and other related matters) Regulations, 2020**. Key provisions considered include:

– **Regulation 3(1):** The company’s Memorandum of Association must authorize electricity trading. GTPL’s Clause 1 of its MoA explicitly states: *”To establish and carry on the business of trading in electricity, both inter-State and intra-State, including the sale and purchase of electricity…”*
– **Regulation 3(2):** The applicant must have at least one full-time professional with qualifications and experience in power system operation and commercial aspects of power transfer (including finance, commerce, and accounts). GTPL submitted details of Mr. [Name not specified in extract] via affidavit dated February 10, 2026, confirming compliance.
– **Regulation 3(3) – Category V Requirements:** A Category V licence (the highest category for inter-state trading) requires:
– Net worth of **Rs. Two Crores (INR 2,00,00,000)** .
– Minimum current ratio and liquidity ratio of **1:1** as on the date of the Audited Special Balance Sheet.

#### 3. Financial Compliance Analysis
The Petitioner submitted an **Audited Special Balance Sheet as of December 15, 2025**, which was examined by the Commission. The financial position was found to be fully compliant:

| Financial Metric | Requirement | GTPL’s Position (as on 15.12.2025) | Compliance Status |
| :— | :— | :— | :— |
| **Net Worth** | Min. INR 2.00 Cr | **INR 2,00,13,000** (200.13 Lakhs) | **Compliant** |
| **Current Ratio** | Min. 1:1 | **6254.93:1** | **Compliant** |
| **Liquidity Ratio** | Min. 1:1 | **6254.93:1** | **Compliant** |

– **Net Worth Composition:** The net worth was computed as:
– Paid-up Equity Capital: INR 200.00 Lakhs
– Surplus (P&L Account): INR 0.13 Lakhs
– Less: No deductions for loans to associates or deferred expenditure.
– **Asset Position:** The company holds **INR 200.16 Lakhs in current assets** (primarily cash and cash equivalents of INR 200 Lakhs) against negligible current liabilities of INR 0.03 Lakhs, explaining the exceptionally high liquidity ratios.

#### 4. Procedural Compliance (Regulation 6)
The Petitioner followed the mandatory public notice procedure:

– **Website Upload:** The application was uploaded on the company’s website as required.
– **Newspaper Publications:** Notices were published on **December 27, 2025**, in multiple newspapers covering all five regions of India:
– *Indian Express* (Lucknow, Kolkata, Jaipur, Delhi, Chandigarh, and North-eastern states editions).
– *Financial Express* (Pune, Mumbai, Lucknow, Kochi, Hyderabad, Delhi, Chennai, Chandigarh, Bengaluru, and Pune editions).
– E-newspaper editions covering numerous cities across India.
– **Objection Period:** A 30-day period was allowed for public objections, as per Regulation 6(5).
– **No Objections Received:** The Petitioner confirmed, and the Commission noted, that **no objections or suggestions** were received from the public in response to the notices.

#### 5. Commission’s Findings and Order
– **Preliminary Determination:** The Commission, after its preliminary examination, found that GTPL **meets all requirements** specified in the Trading Licence Regulations for the grant of a Category ‘V’ trading licence.
– **Proposal to Grant Licence:** The Commission formally proposed to grant the licence.
– **Next Steps:**
1. A notice under Clause (a) of Sub-section (5) of Section 15 of the Electricity Act, 2003, is to be issued, inviting **further suggestions or objections** to the Commission’s proposal.
2. The petition was scheduled for a **final hearing on February 26, 2026**, after which the formal licence is expected to be issued, barring any adverse objections.

#### 6. Key Observations
– **Newly Incorporated Company:** GTPL was incorporated only on December 1, 2025, and applied for the licence almost immediately. Its balance sheet as of December 15, 2025, reflects a “shell company” structure with share capital and cash but no operational assets or liabilities, which is typical for a newly formed trading entity seeking a licence.
– **High Liquidity:** The extraordinarily high liquidity ratios (6254.93) are a function of the company’s pre-operational stage and are not indicative of future operational metrics. They easily satisfy the regulatory minimum.
– **Smooth Process:** The application appears to have proceeded without any public opposition, suggesting a straightforward approval path.

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