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Power Finance Corporation Ltd. (NSE: PFC, BSE: 532810) is an Indian financial institution.
Established in 1986, it is the financial back bone of Indian Power Sector. Net worth of the company
in the year 2007-2008 was 8688 Crore Indian Rupees.[1] Initially wholly owned by the Govt. of India,
the company issued an IPO in January, 2007. The issue was oversubscribed by over 76 times,
which is the largest for an IPO of any Indian Company in recent times.[2] PFC is listed on the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE). The company has been conferred
with many prestigious awards, the latest of which is "KPMG-Infrastructure Today Award 2008" for its
contribution in development of power sector. It is also an ISO 9001:2000 certified company[3] and
enjoys the status of Navratna Company in India.
Contents
[hide]
1 Organization Structure
2 Borrowings
3 Operations
4 Subsidiary Companies
5 Awards & recognitions
6 Notes
7 External links
Organization Structure[edit]
The Corporation is headed by the Chairman and Managing Director; who at present is Sh. M K
Goel.[4] The company has three wings, each headed by a Functional Director namely, Commercial
Division, Projects Division and Finance & Financial Operations division. The Commercial Division
looks after the credit appraisal and categorization of borrower entities, power sector reforms, review
& analysis. The Projects Division controls the operation in various states and project appraisal.
Finance & Financial Operations Division looks after the Fund Mobilization and Disbursement. PFC is
a lean organization. The number of employees during year 2013-2014 were 440.
Borrowings[edit]
The major part of PFC's funds are raised through Rupee denominated bonds. PFC bonds enjoy the
highest credit rating in the Indian market and in international markets, they are rated at par with the
Indian Sovereign rating. It also borrows short term and long term from various banks and other
Financial Institutions. It has also raised External Commercial Borrowings (ECB) through private
placement in US market.
Operations[edit]
Since its inception, PFC has been providing financial assistance to power projects across India
including generation, transmission, distribution and RM&U projects. Recently, it has forayed into
financing of other infrastructure projects which have backward linkages to the power sector like coal
mine development, fuel transportation, oil & gas pipelines etc. The borrower profile includes State
Electricity Boards, State sector power utilities, Central sector power utilities and Private sector
companies. PFC is also the nodal agency for the implementation of the ambitious Ultra Mega Power
Plants (UMPPs) and the R-APDRP programme[5][6] of Govt. of India. The company also has the
mechanism of rating different state Power Utilities on its performance.
Subsidiary Companies[edit]
PFC presently has nine subsidiary companies. PFC Consulting Ltd. (PFCCL) is a wholly owned
subsidiary handling fee based services. The six other companies, namely Coastal Karnataka Power
Limited, Coastal Tamil Nadu Power Limited, Coastal Maharashtra Power Limited, Orissa Integrated
Power Limited, Jharkhand Integrated Power Limited and Akaltara Power Limited, are SPVs (Shell
Companies) created for implementing the Ultra Mega Power Projects.
Financial Policies/Products
1. Fund Based
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Asset acquisition
Bridge Loan
Buyer's Line of Credit
Corporate Loan
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Guidelines for funding Grid connected Solar Thermal Private Sector Power Generation Projects.
Refinancing of Debt of Commissioned Projects along with Additional Corporate Loan for New-Expansion-
2. Non-fund Based
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Guarantee
Letter of Comfort
Policy for Guarantee for Credit Enhancement
Services
Non-fund Based
Consultancy Services
Overview of Consultancy Services being provided by PFC Consulting Limited
Overview of Capital Advisory Services being provided by PFC CAS Limited
http://www.pfcindia.com/Content/Services.aspx
Performance Highlights
Your Company has delivered yet another year of significant achievements despite the tough environment. The net
profit for fiscal 2014 has gone up by 23% from Rs. 4,420 Crore to Rs. 5,418 Crore, driven by loan asset growth of
18% from Rs. 1,60,396 Crore to Rs. 1,89,231 Crore and increased margins (interest spread) by 59 basis points from
2.86% to 3.45%.
Given the sound profitability during fiscal 2014, your Company paid an interim dividend of 88%, which is almost 1.5
times of last fiscal''s interim dividend. Further, an additional 2% dividend has been proposed as final dividend. Your
Company therefore proposed to pay the shareholders a 90% dividend for fiscal 2014.
Despite the volatile interest rates and forex markets during the fiscal, your Company managed to raise Rs. 45,220
Crore keeping the cost of funds competitive at marginal cost of 8.96% (including Rs. 5,000 Crore Tax-free bonds).
Your Company was also able to maintain low NPAs despite the industry showing trends of rising NPAs, As on
31.03.2014, Gross NPAs have come down to 0.65% from 0.71% last fiscal & net NPAs have come down to 0.52%
from 0,63% last fiscal.
Business growth didn''t suffer despite economy and power sector facing headwinds during fiscal 2014. Your
Company managed loan sanctions of Rs. 60,729 Crore against a target of Rs. 59,000 Crore and disbursed Rs.
47,162 Crore against a target of Rs. 47,000 Crore for fiscal 2014. Further, we have outstanding loan sanctions of
Mrs. 1.56 lakh crore (l.e more than 3 times the disbursements of fiscal 2014). This indicates the strong business
pipeline going forward.
http://economictimes.indiatimes.com/power-finance-corporation-ltd/chairmanspeech/companyid4519.cms
venture company, namely PTC Ltd in association with NTPC and PGCIL. In the year 1999, the company
launched consultancy services in order to provide consultancy services to both state owned and private
power utilities for the power and financial sectors.
In the year 2003, the company was appointed as a nodal agency by the MoP to fund the India Power
Fund scheme to catalyze the process of fresh equity investment in the power sector. In the year 2005,
the company entered into MoU with LIC and ten leading public sector banks for consortium financing of
power projects. In the year 2006, the company incorporated seven subsidiary companies for developing
UMPPs. They issued the letter of intent for the Sasan and Mundra UMPPs. In the year 2007, they
incorporated their eighth subsidiary company for developing UMPP.
During the year 2006-07, the company launched their IPO and the holding of Government of India
reduced from 100% to 89.78% of the paid-up equity. On successful completion of bidding process, two
of the subsidiaries, Coastal Gujarat Power Ltd and Sasan Power Ltd were to Tata Power Company Ltd and
Reliance Power Ltd on April 22, 2007 and August 7, 2007 respectively. The company was registered as a
Non Banking Financial Company by RBI and was conferred with the status of Nav Ratna by the Govt of
India on June 22, 2007.
During the year 2007-08, the projects, namely Maneri Bhali U-1,3&4 (228 MW) of UTJVNL in Uttaranchal,
Balimela U-7 of OHPC in Orissa and Teesta V HEP U-2 (170 MW) of NHPC in Sikkim, which were
supported by the company were commissioned. The company sanctioned loans worth Rs.190 crore for R
& M and Life Extension of thermal power plants. Also, they sanctioned Rs.222 crore for R&U of Hydro
Power Projects.
In March 2008, the company signed an MoU with RITES Ltd (A Govt. of India Enterprise) to facilitate
import of coal from African countries and elsewhere. Also, they signed an MoU with TNEB whereby PFC
would FINANCE cogeneration projects of around 250 MW planned to be set up at a cost of Rs1200
crore in various cooperative and public sector sugar mills in the state of Tamil Nadu.
In March 25, 2008, the company launched a 100% owned subsidiary company, namely PFC Consulting
Ltd for providing consulting services. Also, they incorporated an advisory company namely Power Equity
Capital Advisors Private Limited to provide advisory services related to equity investments in Indian power
sector.
During the year 2008-09, the company established a Consortium Lending Group (CLG) with an aim to
give fillip to Consortium Lending Operations, particularly through the Power Lenders' Club (PLC) which
has 21 members including LIC, HUDCO and 18 Indian banks. The projects in association with the
company, namely Baglihar HEP (3x150 MW) of JKPDCL in Jammu and Kashmir, Priyadarshni Jurala HEP
(6x39 MW) of APPGCL in Andhra Pradesh and Varahi HEP (2x115 MW) of KPCL in Karnataka were
commissioned.
During the year, the company sanctioned loans worth Rs.214 crore for R&M and life extension of thermal
power plants. Also, they sanctioned Rs.48 crore for R&M of hydro power projects. Chhattisgarh State
Electricity Board was reorganized / unbundled into Chhattisgarh State Power Holding Company Ltd.,
Chhattisgarh State Power Generation Company Ltd., Chhattisgarh State Power Transmission Company
Ltd., Chhattisgarh State Power Distribution Company Ltd. and Chhattisgarh State Power Trading
Company Ltd with effect from January 1, 2009. Also, the company in association with NTPC, NHPC and
TCS promoted National Power Exchange Ltd with an authorized capital of Rs.50 crore.
The company was conferred with the coveted 'KPMG-Infrastructure Today Award 2008' for 'Most Admired
Government Enabler - Power' category. They also bagged Dalal Street's 'First DSIJ Award 2009' in the
category of 'Highest Profit Per Employee' and 'India Power Award 2008' for PFC's role and association as
implementation agency with 'Distribution Reforms, Upgrades & Management' (DRUM) Programme of
http://www.business-standard.com/company/power-finance-corporation-ltd12068/information/company-history
Rural Electrification Corporation Limited (REC) is a leading public Infrastructure Finance
Company in Indias power sector. The company finances and promotes rural electrification projects
across India, operating through a network of 13 Project Offices and 5 Zonal Offices, headquartered
in New Delhi. The company provides loans to Central/ State Sector Power Utilities, State Electricity
Boards, Rural Electric Cooperatives, NGOs and Private Power Developers.
REC is a Navratna Company[2] functioning under the purview of the Ministry of Power Government
of India. The company is listed on both National Stock Exchange of India and Bombay Stock
Exchange.
The company is currently among the top 500 Global Financial Services brands by UK-based
plc Brand Finance (Brand Finance @ Global Banking 500 for 2010).[3] The company is also among
the Forbes Global 2000 companies for 2010.[4]
Contents
[hide]
1 Business Operations[5]
o 1.1 Services Provided
o 1.2 Projects
o 1.3 Resource Mobilisation
o 1.4 IPO & FPO
2 History[8]
o 2.1 Time-line
o 2.2 Early years
o 2.3 Post-Liberalized India (1990s)
o 2.4 2000Current
3 Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
o 3.1 Rural Electrification Status
4 Central Institute for Rural Electrification (CIRE)[16]
5 Subsidiaries
6 Energy Efficiency Services Limited (EESL)
7 Indian Energy Exchange (IEX)
8 Recent Awards
9 References
10 External links
Business Operations[5][edit]
(in ): 5000
RECs business model spans across the value chain of power infrastructure financing including
(a) equipment finance,
(b) technical/ financial appraisal of project,
(c) project finance as well as short term or bridge loans for generation, intensive electrification,
transmission, distribution, repair and maintenance,
(d) support functions like project monitoring, consultancy and advisory.
The company operates autonomously as a Central Public Sector Enterprise under the Ministry of
Power,[6] Government of India and also acts as nodal agency for expansive Government of India
schemes for building electricity infrastructure.
Business operations in India are supported by a network of 19 offices headquartered in New Delhi.
Services Provided[edit]
The company is primarily engaged in providing finance for rural electrification projects across India
and provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric
Cooperatives, NGOs and Private Power Developers. The company sanctions loan as a sole lender
or co-lender or in consortium with or without the status of lead financer. It also provides consultancy,
project monitoring and financial/ technical appraisal support for projects, also in the role of nodal
agency for Government of India schemes or projects.
Projects[edit]
REC finances all types of Power Generation projects including Thermal, Hydel, Renewable Energy,
etc. without limit on size or location. The company aims to increase presence in emerging areas like
de-centralised distributed generation (DDG) projects, and new and renewable energy sources to
reach remote and difficult terrains not connected by power grid network.
In Transmission & Distribution (T&D), REC is primarily engaged in ascertaining financial
requirements of power utilities in the country in the T&D sector along with appraising T&D schemes
for financing. REC has financed T&D schemes for system improvement, intensive electrification,
pump-set energisation and APDRP Programme. The company is also actively involved in physical
as well as financial monitoring of T&D schemes.
REC also offers loan products for financing Renewable Energy projects. The company has tied up
a line of credit for 100M (approximately 6000M) with KfW under Indo-German Development
Cooperation for financing renewable energy power projects at concessional rates of interest. Eligible
projects include Solar, Wind, Small Hydro, Biomass Power, and Cogeneration Power & Hybrid
Projects.
Resource Mobilisation[edit]
REC raises funds through various domestic and international sources, including Commercial Banks,
Capital Gain Tax Exemption Bonds, Non-Priority Sector Bonds & Commercial Paper, and Official
Development Assistance loan from international agencies. International collaborations have included
past tie-ups for External Commercial Borrowings with Standard Chartered Bank (London), DEPFA
Investment Bank Limited (Cyprus)[7] etc. as well as current tie-ups with KfW (Germany) and Japan
International Cooperation Agency(Japan) under Official Development Assistance. As an IFC, REC
can also issue Infrastructure Bonds and raise funds up to US$500M through External Commercial
Borrowing in a year.
Domestic debt instruments of REC are assigned the highest rating "AAA" by reputed credit rating
agencies CRISIL, Fitch and ICRA. Moodys and Fitch have rated its international credit rating at par
with Indias sovereign rating.