Power Finance Corp FY13 net up 46%

NBFC mulling banking foray

Power Finance Corporation (PFC), India’s state-owned lender to power projects, has posted a 46% jump in net profit for the financial year ended March at the back of higher loan disbursements. The company recorded a net profit of Rs 4,420 crore during 2012-13 as compared to Rs 3,032 crore in the previous financial year.

“Our loan disbursements increased 13% from Rs 39,818 crore in 2011-12 to Rs 45,151 crore last financial year leading to the growth in profit. Profitability was also helped by a 64 basis point increase in lending rate,” PFC Chairman Satnam Singh said. The company’s loan assets grew 23% from Rs 130,072 crore at the end of March 2012 to Rs 160,367 crore last financial year.

Total income of PFC also jumped 32% from Rs 13,037 crore in 2011-12 to Rs 17.273 crore last financial year ended March. The company’s spread -- difference between lending rate and borrowing cost -- increased 62 basis point to 2.87% during the year.

The Non-Banking Finance Company (NBFC) mobilized Rs 40,407 crore during the financial year through bonds and medium-term term and short-term loans. The company’s networth grew 15% from Rs 19,493 crore at the end of March 2012 to Rs 22,351 crore in March this year. Singh also informed that PFC’s Gross Non-Performing Assets (NPAs), as a percentage of Gross Assets, came down to 0.71% as on 31 March 2013 as compared to 1.04% year ago.

For the quarter ended March, the company posted a 58% jump in net profit at Rs 1,294 crore. Total income grew 27% to 4,670 crore during the period. Spread during the three months period increased 66 basis points to 2.99% and interest income grew 40% to Rs 1,726 crore.

Banking foray

The PFC Chairman also announced that the company is looking at taking up equity stake in any one of the public sector banks. “PFC is exploring the possibility of acquiring stake in one of the public sector banks, The proposal is with the power ministry and the finance ministry. They are currently examining it,” Singh said. He refused to share details but said the “substantial” stake should allow PFC to add a board in that bank.

Sources said the company is eyeing a 26% stake or even more, in any one of the five banks including Punjab and Sind Bank, Indian Bank, Central Bank of India, Bank of Maharashtra and the Union Bank of India. The Finance ministry is understood to be discussing the proposal with the Reserve Bank of India (RBI). The proposal comes at a time when many companies, including NBFCs like PFC, are mulling applying for banking licences. The RBI had issued the much-awaited final guidelines on new banking licences in February this year.

PFC's share price at the Bombay Stock Exchange (BSE) today closed at Rs 190.8, down 2.1% as compared to previous close.