PTC India Financial Services has sanctioned Rs 1,032 crore to nine energy projects, says director (finance) and CFO Pawan Singh.
PTC India Financial Services has sanctioned Rs 1,032 crore to nine energy projects says director (finance) and CFO Pawan Singh. "We have moved to the coal mines as well as the rail sidings and we have also for the first time taken financing of power transmission project," he told CNBC-TV18 in an interview.
Below is an edited transcript of the interview.
Q: There is a bit of buzz in the market that you have received Rs 150 crore from Tamil Nadu and Uttar Pradesh (UP) state electricity boards (SEBs) of your pending Rs 820 crore. Would you confirm or deny that?
A: PTC could be receiving this kind of an amount. I am from PTC India Financial Services. Basically, I would be mentioning here about our recent achievement that we have sanctioned loan of Rs 1,032 crore in the recent board meeting. For the first time, we have taken some new pioneer projects, that is, we have started to finance rail sidings.
We were earlier focusing on the energy value chain but large portion of our exposure was largely to the thermal and hydro. Now, we have moved to the coal mines as well as the rail sidings and we have also for the first time taken financing of power transmission project of 765 kv which is coming in UP. So, with this our loan book size increases to about Rs 11,000 crore. At present, we are both in the conventional as well as renewable space combine together. We are supporting capacity addition of more than 30,500 megawatt (MW).
Q: Can you give us an idea of the quality of your asset book in the past quarter? Has there been any problems because of the power companies that you financed not getting receivables from discoms or are the projects that you financed not still at that mature stage?
A: Many of our projects do have to reach commercial operation but that percentage is now falling down. In fact, over a year the percentage of projects commission is more than the projects, which are in the pipeline. The reason for that is: we have also shifted our disbursal to the renewable sector where the commissioning takes place much faster.
As far as our asset quality is concerned, we have a nil NPA so far. At present, we do not have any distressed account where we are literally concerned. Good part is that in fact it looks like that the worst for the power sector is likely to come to an end. So, we look for a more optimistic year FY13-FY14.
Q: What would be the disbursements targets then if you are saying that the vows are over and you are looking at a good year going forward?
A: Disbursement target because the numbers we would reveal over a period of time but it looks like that we would be doing much better than what we did last year.
Q: What can you tell us about your margins? What is the rate at which you are raising money and what are you lending it at?
A: Our cost of capital is 8.30 percent and our average lending is about 13.5 percent. Today, we are maintaining a spread of almost 5.5 percent.
Q: You said that some projects have come to fruition in the assets that you have lent to, do you witness any stress at all? I am coming from the point that a lot of mega projects whether it is the Mundra project or whether it is the Adani Power Project are under stress, are debating with the CERC to raise their long-term power tariffs, considering that do you notice any stress in the assets that you have lent to?
A: We have not taken any exposure in Mundra nor we have taken any exposure in Adani. So, we would not be either way impacted with the CERC decisions but as far as our projects are concerned, we do not have any pressure presently and what we foresee is that as the policy on case I bid are out, the coal pulling clarity is there, I do not think there should be a major concern on any of these assets because many of these assets have come at a time -- in fact the cost of production of power would be much competitive, it would be a great parity. So salability of power would not be a concern.
Q: I have just one concern with the project that you just referred to as a major diversification , the private railway siding projects being developed in Chhattisgarh to offload coal. I am coming entirely from a person who reads newspaper reports of those areas getting infested with a naxal activities, this place is safe from that kind of activity?
A: Not whole of Chattisgarh is infested with naxalites. So these areas of course are not in that naxalite prone zone. Moreover on the land acquisition, most of the issues have been covered.
Q: I was looking at the shareholding pattern for this quarter and what stands out is that the foreign institutional investors (FIIs) holding is down from 21 percent to 9 percent and the domestic institutional investors (DIIs) holding is up from 4 percent to 16 percent. I do not have the details on who sold and who bought, would you have any kind of details?
A: One or two FIIs took a policy stand and they were deciding to come out of certain investments, which they had made. So, that could be a reflection of that particular event which has occurred.
PTC India Fin stock price
On October 22, 2014, PTC India Financial Services closed at Rs 47.55, up Rs 1.20, or 2.59 percent. The 52-week high of the share was Rs 49.20 and the 52-week low was Rs 10.81.
The company's trailing 12-month (TTM) EPS was at Rs 4.19 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 11.35. The latest book value of the company is Rs 24.00 per share. At current value, the price-to-book value of the company is 1.98.
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