PFS to bear impact of Rs 260 crore as 40 pc borrowers avail moratorium: MD&CEO

Non-banking financial company PFS will bear an impact of Rs 260 crore on regular repayments as nearly 40 per cent of its borrowers have asked for moratorium, a top company official said.

The company provides loans to infrastructure and power sectors.

As per RBI norms, moratorium on loan repayments has been provided to borrowers due to the lockdown, which has seriously impacted the businesses and earnings.

"Company's lending business is not impacted to a large extent due to the lockdown but some marginal cash issues are coming up during this period," Pawan Singh, MD and CEO, PTC India Financial Services (PFS) said in an interaction with PTI.

Singh said as many as 40 per cent of PFS borrowers have asked for the moratorium, as per RBI norms, and the company has extended the same to the intended beneficiaries.

"By and large we are very very marginally affected by the crisis (due to the coronavirus pandemic). Somewhere about 40 per cent of borrowers have asked for the moratorium, which we are giving. Since we have very strong liquidity position, it is okay for us to extend the same," Singh said.

The company's exposure to these 40 per cent borrowers is of Rs 4,000 crore, he added.

"There is not any serious issue as of now which is affecting us. With regard to moratorium, roughly about Rs 4,000 crore is the exposure on the books and the impact is only of Rs 260 crore. It does not mean we have to make this much crore of provision, but we have added one additional quarter including principal and interest for the repayment.

"So it is like if they were to pay in 30 instalments, now they will have to pay in 31 instalments," Singh said.

PFS will spread the repayments due to the moratorium to the remaining instalments.

Singh said the company is equally comfortable on the liability side, as it has enough capital with as much as Rs 2,000 crore as undrawn limits.

He also said the company has not opted for any kind of moratorium from its lending banks because of its comfortable liquidity position.

Over the last 2 years, PFS has reduced its exposure to the thermal power sector to nearly 5 per cent of its total assets, he added.

On the other hand, the company has strengthened its exposure to the renewable power sector, he said adding that there are some good projects in the road and infrastructure sector that the company has been providing funding for.

He also emphasised the need for the private sector to participate in the country's infrastructure building.

On credit demand, he said it will always be there because a lot of infrastructure is dependent on the government.

"Now the government's priority will not only be infrastructure but other areas as well. The private sector has to play a bigger role," he added.

The company'stotal outstanding credit or the aggregate of loan assets and non-fund based commitments against sanctioned loans, stood at Rs 12,641 crore as on December 31, 2019.

Loan assets aggregated to Rs 12,003 crore and the outstanding non-fund based commitments aggregated to Rs 638 crore.

PFS is a non-banking finance company promoted by PTC India Limited.