State-run Power Finance Corporation (PFC) on Wednesday reported a record standalone profit of Rs 6,953 crore for the full year and standalone net profit of Rs 2,118 crore for the quarter ended March 31, 2019. Company officials said that debt resolution of the company's stressed assets was underway and a merger with Rural Electrification Corporation (REC) was being discussed.
While the net profit reported for the quarter ended March 31, 2019, was more than double the Rs 796.35 crore reported in the same period a year ago at the standalone level, the standalone profit for FY19 was 58 per cent higher than Rs 4,386.77 reported crore a year ago. Full year consolidated profit for the company was at Rs 1,2640.27 crore, 7 per cent higher than Rs 11,779.44 crore reported a year ago.
Speaking on the proposed merger of Rural Electrification Corporation (REC) with the company, PFC's CMD Rajeev Sharma said that due diligence was underway. “On the direction of the ministry of power, we appointed a consultant to explore the pros and cons of the merger, once done the ministry will take the final call,” said Sharma.
As of March 2019, the company’s loan asset book crossed Rs 3 trillion and grew at a rate of 13 per cent. “Despite the liquidity challenges in the market, PFC has managed to deliver excellent business growth by leveraging its strong credit rating profile and long established reputation.” The company said in its statement added,”In spite of the challenges in power sector, PFC has maintained a consistent growth rate. The increase is attributable to PFC’s strategy to diversify its loan book,” Sharma added.
In a bid to diversify its loan portfolio, the company is planning to expand in related segments like electric vehicles, smart cities sewage water treatment (to be used in thermal plants), charging stations, micro and mini grids and lift irrigation. “We have sanctioned loans to a lift irrigation in Telangana for 34,000 crore, we are exploring other options like electric and mini grid, they should pick up soon,” said Sharma.
The company in its statement added, “The impact of resolution process has started reflecting in numbers. In March quarter, GVK Ratle, where PFC had an exposure of Rs 800 crore, has been upgraded as a Standard Asset from non performing asset (NPA) category.”
Speaking on the ongoing debt resolution of power assets, Sharma said that the company had lent Rs 29,000 crore worth of its loan book to 29 stressed power projects.“Of these 15 projects are in National Company Law Tribunal (NCLT) and the remaining we are trying to resolve outside NCLT,” Sharma said.
The company in its press statement added that for Rattan India Amravati, PFC had received a revised one time settlement proposal and was negotiating with the borrower. PFC is expecting full recovery of principal amount lent to Dans Energy, Shiga Energy and Essar Transmission with an aggregate exposure of Rs 1,400 crore. The three projects, company officials said, will see a resolution in the next three to four months time. For GMR Chattisgarh, the company said, all 17 lenders had approved Adani Power’s bid proposal. Sharma added that KSK Mahanadi would be sent to NCLT for resolution after the bidder for the project withdrew its proposal.