REC plans to increase loan book over two-fold to Rs 10 trn by 2030

State-owned non-banking finance firm REC Ltd is planning to increase its loan book over two-fold to Rs 10 lakh crore by 2030, including Rs three lakh crore for renewable energy projects.

This assumes significance given India's ambitious target of having 500GW of renewable energy capacity by 2030. REC Ltd's loan book is Rs 4.35 lakh crore as of March 31, 2023.

At present, India has a renewable energy capacity of 1,25,692.30MW, excluding 46,850.17 MW of large hydropower. As much as 82,000 MW of renewable energy capacity is under construction, excluding 14,000 MW of hydro projects.

India will have to add around 50,000 MW of clean energy capacity every year to meet the target of 500 GW by 2030. Thus finance is an important component of these projects.

The REC Ltd will have a loan book of Rs 10 lakh crore by 2030, and 30 per cent of it would come from renewable energy projects, REC Ltd Chairman and Managing Director Vivek Kumar Dewangan said in a media interaction.

He told reporters that the company is eyeing Rs three lakh crore loan book for renewable energy by 2030.

He also informed about the government's permission to have up to 33 per cent of its loan book for infrastructure and logistics sectors.

The remaining one-third would be for discoms and thermal projects.

Dewangan also talked about the diversification plans of REC Ltd under which it would focus on renewable energy and infrastructure and logistics sectors.

REC has recorded the highest-ever quarterly and yearly profit at Rs 3,001 crore and Rs 11,055 crore during the March quarter and fiscal 2022-23, respectively.

The earnings per share for the year ended March 31, 2023, stands at Rs 41.86 per share against Rs 38.02 per share a year ago. The return on net worth during the year was 20.23 per cent.

The net worth has grown to Rs 57,680 crore as on March 31, 2023, an increase of 13 per cent YoY (year-on-year).

The loan book increased by 13 per cent to Rs 4.35 lakh crore against Rs 3.85 lakh crore.

Signifying improving asset quality, the Net Credit-impaired assets have reduced to 1.01 per cent with a provision coverage ratio of 70.64 per cent on NPA assets (bad loans), as of March 31, 2023. During the year 2022-23, no new NPAs (bad loans) were added.

The Capital Adequacy Ratio stands at a comfortable 25.78 per cent as on March 31, 2023, implying ample opportunity to support future growth.

The company's foray into the non-power infrastructure sector aided its growth and development, with sanctions of Rs 85,735 crore (in FY23) coming from the infrastructure and logistics segment.

In line with the government's focus, the company continues to grow its renewable business, with sanctions of Rs 21,371 crores (in fiscal 2022-23) in this segment.

The REC Ltd sanctioned a total loan of Rs 2.68 lakh crore in 2022-23. The company disbursed Rs 96,846 crore in 2022-23.