PFS turns to green lending; to fund port, road projects

Company's main focus now is on solar power

With the investment pipeline drying up in conventional power projects, more than half of PTC India Financial Services' lending has moved towards renewable energy. The company is also seeking to diversify its portfolio and fund port connectivity and hybrid annuity road projects. PFS' main focus now is on solar power.

"Conventional power developers facing delays have an alternative opportunity in solar power. The government is also promoting investment in this sector. Future opportunities will come from energy efficiency and offshore wind projects," Ashok Haldia, managing director and chief executive officer, PFS, told Business Standard.

A non-banking finance company promoted by PTC India Limited, PFS is recognised by the Reserve Bank of India as an infrastructure finance company. The company funds the entire energy value chain, including mining developers and operators. In green energy, it has extended loans to Green Infra, Renew Wind, Azure Power, ACME, Ostro and Orange Power.

"The wind energy sector took off earlier, but there is more volatility because of generation uncertainty. The sun is more stable than the wind," Haldia said. The challenges before the renewable sector, however, continue to be land acquisition, power purchase agreements and tariffs.

In wind, particularly, developers were facing problems of non-signing of PPAs, forcing generators to back down, Haldia said.

The company' on Friday announced a 35 per cent growth in total loan assets to Rs 8,634 crore as on March 31, 2016, from Rs 6,379 crore a year ago. This does not include non-fund based commitments (LOCs) of Rs 272.53 crore. PFS' cumulative debt sanctioned stood at Rs 15,074 crore, of which 53 per cent was to the renewable energy sector. The company plans to raise up to Rs 750 crore in one or more tranches. Haldia said the capital raising plan would boost PFS' capital base.

PFS' revenue for the fourth quarter ending March 2016 increased by 24 per cent to Rs 270 crore from Rs 217 crore in the same period of the previous year. Interest income during the quarter grew by 27 per cent to Rs 256 crore from Rs 201 crore in the fourth quarter of 2014-15. Net interest income grew by 28 per cent to Rs 115 crore from Rs 90 crore in January-March 2015.

The company's profit after tax during the quarter more than doubled to Rs 49.03 crore from Rs 15.81 crore in the same period of the previous year. The yield on loan assets was 12.82 per cent whereas the cost of borrowed funds was reduced to 8.95 per cent during the quarter from 9.30 per cent in the same period of the previous year.

PFS announced its board had recommended a 12 per cent dividend at Rs 1.20 a share for 2015-16.