PFC to raise Rs1,153 crore through debt; FPO next year
11 Nov 2010
Power Finance Corp (PFC), the state-run lender for power projects, plans to raise $260 million (Rs1,153 crore) of external commercial debt and mop up Rs1,200-1,500 crore through tax-free infrastructure bonds by March, chairman and managing director Satnam Singh said on Wednesday.
The fund raising is part of the company's plan to raise a total of Rs27,700 crore this fiscal to meet its annual loan disbursal target of the same amount. In the first half of this fiscal, the company raised Rs15,000 crore.
''We are awaiting government approval for the infrastructure bond issue. We may raise Rs1,200-1,500 crore in December-January,'' Singh said at a press conference in Mumbai to announce the company's second quarter financial results.
PFC reported a net profit of Rs700.8 crore in the quarter ended 30 September, up 9.9 per cent year-on-year. The company's income from operations rose 26.3 per cent year-on-year to Rs2,530.8 crore.
The company also said it plans to hit the capital market with a follow-on share issue representing up to 20 per cent of its paid up capital by early 2011-12. ''We will have to wait for the government's decision on what proportion of the follow-on issue would be divestment by the government,'' Singh said.
Banking foray
He also said PFC would soon appoint a consultant for its banking foray. ''We have spoken to Rural Electrification Corp, NTPC, PowerGrid for the banking initiative. We may also get a private sector partner,'' he said. PFC, which has already got the status of a non-banking finance company (infrastructure), may also use the platform to enter into banking independently.
R Nagarajan, director (finance) PFC, added that the company's plan to go for banking space will be a strategic move. He said the proposed foray may help the company reduce the interest rate. The company charges an interest rate in the range of 9.25-12 per cent from its borrowers.
