State-owned Power Finance Corporation (PFC) is planning to float two subsidiaries, one for undertaking consortium lending and the other to focus on funding renewable energy projects, Satnam Singh, chairman and managing director, said on Wednesday.
“To bring in greater focus in smaller projects, we plan to have a subsidiary which will exclusively focus on renewable energy. We mostly get applications to fund power projects of more than 100 Mw capacity. Renewable energy projects are of lower capacity,” Singh said.
PFC will also appoint a consultant to take views on its proposed banking foray, Singh said. The Reserve Bank of India has initiated a process to grant fresh banking licences and will issue draft guidelines in January. PFC, with some other government-run entities like NTPC, Rural Electrification Corporation and Power Grid Corporation may come together to form a banking entity.
Singh also said board approval had come to raise funds via a follow-on public offer up to 20 per cent of the existing capital. This may involve both issuing fresh shares and divesting a part of the government’s stake, presently 89.78 per cent.
Second quarter results
PFC announced an increase of 9.8 per cent in its net profit to Rs 701 crore for the quarter ended September, as against Rs 638 crore in the year-ago period. Total income grew 24 per cent to Rs 2,538 crore from Rs 2,064 crore. It sanctioned loans worth about Rs 17,000 crore during the period.Lower cost of funds has helped increase the spreads to 2.7 per cent compared to 2.46 per cent last year.
