GNPLs under control; IIFC deal to aid infra financing: PFS

PTC India Financial Services (PFS) has signed Memorandum of Understanding (MoU) with India Infra Finance Company (IIFC) to provide financing for infra projects in India. This deal will offer a single window to promoters for such projects.Speaking to CNBC-TV18, Ashok Haldia of PTC India Financial says the deal will help the two companies work together, particularly for infrastructure projects in energy value chain.He says the company has no new stressed accounts and that the provisions are much higher than what regulatory norms require.Meanwhile, he says renewable energy constitutes about 50 percent of PTC India’s total sanctions, adding, the company is in projects involving rail connection between coal mines and power projects as well.The company’s gross non-performing loans (GNPL) are under control and the management is constantly monitoring the area, he says. Below is the transcript of Ashok Haldia’s interview with CNBC-TV18's Ekta Batra and Latha Venkatesh.Ekta: Can you just take us through these Memorandum of Understandings (MoU) that you have signed with India Infra Finance company. What does it mean in terms of the projects you are going to finance and when does it take off?A: This MoU between India Infrastructure Finance Company Ltd (IIFCL) and PTC India Financial Services (PFS) seeks to explore the synergies between IIFCL and PFS and also a strategy to work together for the benefit of the projects in the infrastructure and particularly in the energy value chain. IIFCL is a very big institution and most leading into the infrastructure financing and PFS has positioned itself as a leading institution in financing private power projects particularly in the renewable space and we have also taken a decision that we would also finance infrastructure projects which are related to the energy value chain. So, we continue to maintain our domain expertise and use that domain expertise in financing the projects in the related infrastructure value chain.For example MDO, for example railways connectivity between the mines and the projects, ports handling fuel, so on and so forth.Latha: But how are you a project expert in rails and ports?A: No, I am not saying we are expert in rails. What I am trying to say is that we are already doing projects of the rail connectivity which connects the coal mines to the power projects. So, these kind of projects when it comes to us we would be in a position to increasingly finance them.Secondly, IIFCL has a credit announcement scheme. Our board has also introduced a credit announcement scheme. We will join IIFCL in extending credit announcements either together with them or as a backstop arrangements.Latha: Have you already identified anybody?A: We are in the process of doing some projects.Latha: At the moment only has been signed, the one in solar project with ReNew.A: Right, but they are under consideration of more than a couple of other projects.Latha: Your big worry after your second quarter numbers were that the gross non-performing loans (NPL) went up rather sharply by about Rs 200 crore. How is the situation now, should we brace ourselves in the third quarter also for a fresh increase in slippages?A: No, on their talkage and I had explained the reasons that there are no new stress accounts. These were the accounts that we have been talking for quite some time and as a matter of prudence at least one or two of them we thought that beyond the regulatory norms we should make some provisions that we are already explained at that point of time and we are constantly under review and I will not be able to say what happens as a futuristic statement. We are under the control of the situation, I would only say that.Latha: I understand that your provisioning went up because of the mentioned reasons but marked NPLs also went up, isn't it?A: That is what I also explained that we provided for the stressed assets, for the NPAs much more and much beyond what the regulatory norms would require as. That was one of the reasons of that amount going up. And these were no new accounts that we provided for.Ekta: Leave us with some guidance then. Do you think Q3 we will see worsening of gross NPLs, will it be worse than the 4.07 percent, better or same?A: As I said we are in the control of situations and constantly monitoring our entire portfolio.Ekta: So, it would be maybe similar?A: It would be difficult for me to make a prediction.Latha: Do you lend to the Discoms?A: No, we have to one particular, very small amount but we are trying to position ourselves seeing the opportunity into the transmission and distribution sector in the private arena. We are trying to position ourselves to finance transmission and distribution projects.Latha: What percent of your money goes to renewable energy and what is the goal say, by end of the current financial year, end of FY17?A: Renewable constituted about 50 percent of our total sanctions and we have not - of course as a part of our risk management practices we have given some numbers. But the idea is that good projects and good promoters would certainly be one that we would be financing. So, the 50 percent is our current share throughout the portfolio.