PFC has healthy capitalization levels, diversified resource profile

Apr 21, 2015

State-owned Power Finance Corporation (PFC) plans to raise up to Rs. 60,000 crore through short- and long-term borrowings in the current financial year to primarily meet the funding requirements of power sector units and projects.

It disbursed approximately Rs. 44,300 crore in loans during 2014-15 and sanctioned loans worth Rs 60,000 crore. PFC’s loan assets at end of March 2015 stood at Rs. 2.18 lakh crore — 15 per cent growth over the previous year.

CARE Ratings has assigned ‘AAA’ rating to the borrowing plan for the current financial year. The ratings factor in the majority ownership by the government of India and strategic importance of the development of power infrastructure in India.

PFC, registered as an infrastructure finance company with the Reserve Bank of India, has healthy capitalization levels, diversified resource profile. It has comfortable liquidity and asset quality.

The rating strengths are partially offset by its high exposure to weak state power utilities and high sectoral as well as borrower concentration risk. CARE Ratings said during the nine months ended December 2014, PFC reported a net profit of R.s 4,399 crore on a total income of Rs 18,671 crore. Its gross non-performing loans stood at 0.96 per cent. Capital adequacy was 21.05 per cent at the end of 2014.