State-run Power Finance Corporation has diversified into infrastructure financing with sanctions of Rs 16,000 crore in 2022-23 and is scouting for more projects, Parminder Chopra, who has the additional charge of chairman and managing director, said in an exclusive interview with Moneycontrol on July 19.
The non-banking financial company, which thus far financed power projects, forayed into infrastructure sector in the last fiscal, and the primary focus will be power and energy transition projects, the official added.
“In mid-2022, we have been allowed to fund infrastructure projects with a cap of 30 percent. We have been looking for the sector but our primary focus is going to remain on the power sector and energy transition,” Chopra said.
According to the presentation showed by PFC during their public issue of NCDs, the company has sanctioned Rs 2.32 lakh crore in financial year 2022-23, which is sharply higher than FY21 and FY22.
While, the disbursements of the company in the previous financial year stood at Rs 85,756 crore, as compared to Rs 51,242 crore in FY22 and Rs 88,301 crore in FY21, presentation showed.
The total loan assets of the company have a major share towards generation, which is followed by distribution.
While, in generation, conventional loans holds the major share.
As on March 31, the total loan assets of the company stood at 4.23 lakh crore, of which Rs 2.23 lakh crore is towards generation.
Also read: Power Finance Corporation provides Rs 9,187 crore finance to HPCL Rajasthan Refinery
Cost of funds and borrowing
Chopra said the cost of the funds of the company will align with the market scenario because currently, the inflation is going to be an issue.
She further said that PFC, while borrowing from the market will always maintain the spread of 250-275 basis points (Bps) and the cost of funds will guide between that.
“The curve is not inverted, nor is it a normal curve, so our cost of funds is going to be according to that. To some extent, we will pass it on,” she said.
On the borrowing front, she added that PFC has been borrowing on an average Rs 80,000 crore to Rs 1 lakh crore on a yearly basis. So, primarily, their focus has been on the private placement of bonds. 60 percent of the company's borrowing is from the private placement of the bonds and 20 percent from the foreign markets and the balance amount from the term loans from different scheduled commercial banks.
According to the company’s presentation, the total outstanding borrowings as on March 31, were Rs 3.63 lakh crore. Of the total amount Rs 2.08 lakh crore is borrowing through domestic bonds, and Rs 64,554 crore is through foreign currency bonds.
Domestic and foreign currency bonds constitute 75 percent of the total outstanding.
Also read: PTC India plans to provide 24x7 power trading solutions, says PTC India CMD
NCD issue
Earlier today, the company said it has plans to raise upto Rs 5,000 crore through public issue of non-convertible debentures that will open for subscription on July 21.
The base issue size is Rs 500 crore with a green shoe option of up to Rs 4,500 crore, aggregating up to Rs 5,000 crore, which is within the shelf limit of Rs 10,000 crore, the company said in a release.
The issue will close for subscription on July 28.
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