Cost of borrowing will come down: PTC India

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Cost of borrowing will come down: PTC India

in an interview on CNBC-TV18, PTC India's chairman and managing director Tantra Narayan Thakur said that the listing has not been great but it should improve. "The cost of borrowings would come down since it has been awarded a infrastructure finance company status and is authorized to raise external commercial borrowings."

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » PTC India Fin BSE | NSE 23/05/12 Are Mutual Funds betting on PTC India Fin?

PTC India Financial Services , the non-banking finance arm of power trader PTC India, launched its 15.67 crore IPO on March 16th with a share price band of Rs 26-28 in a bid to strengthen its capital base and to meet future capital requirements.  The issue closed on March 18th. The listing, however, did not gain expected response from the investors. Analysts say the company is heavily dependent on parent PTC India for its business growth and the high cost of borrowings of over 10% was also a concern.

However, in an interview on CNBC-TV18, PTC India's chairman and managing director Tantra Narayan Thakur said that the listing has not been great but it should improve. "The cost of borrowings would come down since it has been awarded a infrastructure finance company status and is authorized to raise external commercial borrowings."

 "We have given short-term financing to the developers on the basis of securities offered by them. Our lending rates are high at present but in the long run, they will come down," he added.

Investors have been concerned about its inertest rates margins, which have been volatile in nature. "The company has done very well since reception and it should continue to perform well," he said. As far as interest rate margins are concerned, he said that the interest rate has been high but that's a manageable risk for the company.

Regarding infrastructure bonds, he said that the company can raise the bonds and the banks will have to make less provisions to raise them.

Thakur also feels that the offer is marketable and he doesn't find it risky. "Our issue size is Rs 30 crore and we will be able to mop up Rs 40 crore as we are more visible in the market now."

More about the IPO

The total size of the PTC IPO was 15.67 crore shares, of which 12.75 crore were freshly issued by the company, and the remaining 2.92 crore were offered by Macquarie India Holdings, an existing investor in the company.

The company faces stiff competition from other large banks and NBFCs, which have a proven track record in the segment and also good clientele.

At present, the company's current loan book stands around Rs 600 crore. However, the company aims to consolidate its position as a financing solutions provider for smaller and medium sized power generation, equipment supply and fuel source projects.

Also watch the accompanying video.

  No takers for PTC Financial on debut, stock nosedives