PFC Sanctions over Rs 1 Lakh Cr; Disburses Rs 68k Cr as Loan in FY20

State-owned power sector lender Power Finance Corporation Ltd (PFC) has sanctioned loan amount of more than Rs 1 lakh crore during the financial year 2019-20.

Further, it had disbursed about Rs 68,000 crore as loan, during FY20, including Rs 11,000 crore disbursed during the last week of March 2020, despite nationwide lockdown, said the non-banking financial company, PFC on Thursday.

On a standalone basis, it had reported revenue growth of 16 per cent in FY20, while its loan asset grew to 10 per cent during the same period. Besides, it also managed a reduction in the cost of funds by 16 bps.

Significantly, the net non-performing assets (NPAs) of the state-owned lender shrank to 3.8 per cent, during FY20, as compared to 4.55 per cent in the same period a year ago.

During the period under review, the lender had resolved two stressed projects i.e. RattanIndia Amrawati & GMR Chhattisgarh worth about Rs 2,700 crore.

However, it’s standalone net profit declined to Rs 5,655 crore, in FY20, against Rs 6,953 crore during the same period last year.

The net profit of the company was impacted mainly on the back of Rs 1,130 crore re-measurement of DTA due to a reduction in the corporate tax rate from 35 per cent to 25 per cent. The other factors that impacted the profit are Rupee depreciation and certain provisioning.

On a consolidated basis also, the net profit of the company slipped to Rs 9,477 crore, during FY 2019-20, from Rs 12,640 crore in the same period the previous year.

However, the two main reasons behind declining in its consolidated net profit for Q4 FY20 to Rs 694 crore from Rs 3,391 crore as cited by PFC are – due to the treatment given to dividend received from subsidiaries. As per requirements of applicable Accounting Standards, dividend income of approximately Rs 1,220 crore received from REC i.e. Rs 1,143 crore, and other group companies got eliminated from consolidated net profit as a part of the consolidation process.

Secondly, REC’s net profit declined in Q4 FY20 to Rs 436 crore from Rs 1,256 crore on the back of sharp forex variation, certain provisioning and adverse DTA impact.

On the other hand, PFC has replaced using the services of S&P Global Ratings (S&P), effective from June 24, 2020, with Moody’s as the rating agency for its USD 400 MN Green Bonds.

Now, it’s rating will be done by two Rating Agencies i.e. Fitch and Moody’s. Also, Moody’s has assigned Baa3 rating to these bonds on June 24, 2020.

Meanwhile, scrips of the company were closed at Rs 89.95 apiece, up 2.33 per cent, from the previous close on the exchange.

In July this year, PFC had incorporated, via its arm PFC Consulting, five of the project-specific special purpose vehicle (SPV) companies. These SPVs will facilitate the evacuation of renewable energy from the states of Andhra Pradesh and Rajasthan.