PFC plans to take equity participation in power projects

Power Finance Corporation (PFC) today said it is looking at raising around Rs 3,200 crore at the lower end to Rs 3,495 crore, at the upper end, through the follow on public offer (FPO). Besides, the corporation also said that it is now looking at equity funding opportunities in power projects and also looking at mining as prospective areas for growth. The day may not be too far off, as the the corporation has been providing funds for power projects.

Corporation’s Director- Finance R Nagarajan, told reporters in Chennai today, at the upper end the company is looking at raising around Rs 3,495 crore and on the lower end Rs 3,224 crore. The Centre will dilute 5 per cent through the FPO.

FPO is to be priced in a band of Rs 193 to Rs 203, with retail investors getting a 5 per cent discount, he added. “One of the main purposes of the FPO is to strengthen the Capital Adequacy Ratio which will increase 3-3.5 percentile from 15.95 per cent, as on March 31, 2011,” he said.

Power Finance Corporation Ltd (PFC), the country’s largest listed term-lending NBFC dedicated to power sector financing, 33 per cent growth in sanctions, 21 per cent growth in disbursements and 22 per cent growth in net profit, said D Ravi, executive director, Power Finance Corporation.

He added that lending to the private sector was 7 per cent of the total disbursements, 65 per cent for state sectors and rest for Centre. Corporation’s project wise loan assets stood around Rs 99,570 crore.

Meanwhile, the Corporation which has been financing debt for power project is now looking at equity participation. “We have moved the proposal to the ministry of power and asked for a few clarifications including if we should restrict our equity participation only in PSU developed projects or we can participate in private sector projects too,” said Nagarajan.

Ravi added, the Corporation will also look at funding standalone coal mine development projects. “Till now, coal mine was part the full project, including development of power plant and coal mine, now we are looking at funding standalone mine development projects.”