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Power Finance Corp.

Power Finance Corporation Ltd. (NSE: PFC, BSE: 532810) is an Indian financial institution.
Established in 1986, it is the financial back bone of Indian Power Sector. Net worth of the company
in the year 2007-2008 was 8688 Crore Indian Rupees.[1] Initially wholly owned by the Govt. of India,
the company issued an IPO in January, 2007. The issue was oversubscribed by over 76 times,
which is the largest for an IPO of any Indian Company in recent times.[2] PFC is listed on the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE). The company has been conferred
with many prestigious awards, the latest of which is "KPMG-Infrastructure Today Award 2008" for its
contribution in development of power sector. It is also an ISO 9001:2000 certified company[3] and
enjoys the status of Navratna Company in India.

1 Organization Structure
2 Borrowings
3 Operations
4 Subsidiary Companies
5 Awards & recognitions
6 Notes
7 External links

Organization Structure[edit]
The Corporation is headed by the Chairman and Managing Director; who at present is Sh. M K
Goel.[4] The company has three wings, each headed by a Functional Director namely, Commercial
Division, Projects Division and Finance & Financial Operations division. The Commercial Division
looks after the credit appraisal and categorization of borrower entities, power sector reforms, review
& analysis. The Projects Division controls the operation in various states and project appraisal.
Finance & Financial Operations Division looks after the Fund Mobilization and Disbursement. PFC is
a lean organization. The number of employees during year 2013-2014 were 440.

The major part of PFC's funds are raised through Rupee denominated bonds. PFC bonds enjoy the
highest credit rating in the Indian market and in international markets, they are rated at par with the
Indian Sovereign rating. It also borrows short term and long term from various banks and other
Financial Institutions. It has also raised External Commercial Borrowings (ECB) through private
placement in US market.


Since its inception, PFC has been providing financial assistance to power projects across India
including generation, transmission, distribution and RM&U projects. Recently, it has forayed into
financing of other infrastructure projects which have backward linkages to the power sector like coal
mine development, fuel transportation, oil & gas pipelines etc. The borrower profile includes State
Electricity Boards, State sector power utilities, Central sector power utilities and Private sector
companies. PFC is also the nodal agency for the implementation of the ambitious Ultra Mega Power
Plants (UMPPs) and the R-APDRP programme[5][6] of Govt. of India. The company also has the
mechanism of rating different state Power Utilities on its performance.

Subsidiary Companies[edit]
PFC presently has nine subsidiary companies. PFC Consulting Ltd. (PFCCL) is a wholly owned
subsidiary handling fee based services. The six other companies, namely Coastal Karnataka Power
Limited, Coastal Tamil Nadu Power Limited, Coastal Maharashtra Power Limited, Orissa Integrated
Power Limited, Jharkhand Integrated Power Limited and Akaltara Power Limited, are SPVs (Shell
Companies) created for implementing the Ultra Mega Power Projects.

Financial Policies/Products
1. Fund Based

Asset acquisition

Bridge Loan
Buyer's Line of Credit
Corporate Loan

Credit Facility for Purchase of Power through Power Exchange

Debt Refinancing
Direct Discounting of Bills - For Buyers
Direct Discounting of Bills - For Sellers
Energy Saving Projects
Financing of Fuel Supply Projects and Equipment Manufacturers
Grants/Interest Free Loans for Studies/Consultancies
Lease Financing for Purchase of Equipments
Lease Financing for Wind Power Projects
Line of Credit for Import of Coal
Project Term Loans (Rupee and Foreign Currency)
Short Term Loan
Short/Medium Term Loan to Equipment Manufacturers
Short Term Loan for SPV in Government Sector
Solar PV Policy to Power Generation Projects (Grid Connected)
Solar PV Policy to Private Sector
Rupee Short Term Loan (STL) to Gencos / Transcos against Identified Receivables from Discoms
Policy for Investment in equity of Power Projects


Guidelines for funding Grid connected Solar Thermal Private Sector Power Generation Projects.

Refinancing of Debt of Commissioned Projects along with Additional Corporate Loan for New-Expansion-

Policy for Underwriting of Debt

Acquisition of projects

Financial Assistance to Distribution Franchisees

2. Non-fund Based

Letter of Comfort
Policy for Guarantee for Credit Enhancement


Non-fund Based
Consultancy Services
Overview of Consultancy Services being provided by PFC Consulting Limited
Overview of Capital Advisory Services being provided by PFC CAS Limited
Performance Highlights

Your Company has delivered yet another year of significant achievements despite the tough environment. The net
profit for fiscal 2014 has gone up by 23% from Rs. 4,420 Crore to Rs. 5,418 Crore, driven by loan asset growth of
18% from Rs. 1,60,396 Crore to Rs. 1,89,231 Crore and increased margins (interest spread) by 59 basis points from
2.86% to 3.45%.

Given the sound profitability during fiscal 2014, your Company paid an interim dividend of 88%, which is almost 1.5
times of last fiscal''s interim dividend. Further, an additional 2% dividend has been proposed as final dividend. Your
Company therefore proposed to pay the shareholders a 90% dividend for fiscal 2014.

Despite the volatile interest rates and forex markets during the fiscal, your Company managed to raise Rs. 45,220
Crore keeping the cost of funds competitive at marginal cost of 8.96% (including Rs. 5,000 Crore Tax-free bonds).

Your Company was also able to maintain low NPAs despite the industry showing trends of rising NPAs, As on
31.03.2014, Gross NPAs have come down to 0.65% from 0.71% last fiscal & net NPAs have come down to 0.52%
from 0,63% last fiscal.

Business growth didn''t suffer despite economy and power sector facing headwinds during fiscal 2014. Your
Company managed loan sanctions of Rs. 60,729 Crore against a target of Rs. 59,000 Crore and disbursed Rs.
47,162 Crore against a target of Rs. 47,000 Crore for fiscal 2014. Further, we have outstanding loan sanctions of
Mrs. 1.56 lakh crore (l.e more than 3 times the disbursements of fiscal 2014). This indicates the strong business
pipeline going forward.

Power Finance Corporation Ltd. (PFC) - Company History

Power FINANCE Corporation Ltd is a leading power sector public financial institution and a non-banking
financial company providing fund and non-fund based support for the development of the Indian power
sector. The company is engaged in power sector FINANCING , and the integrated development of the
power and associated sectors. They provide large range of Financial Products and Services like Project
Term Loan, Lease FINANCING , Direct Discounting of Bills, Short Term Loan, and Consultancy Services
etc for various Power projects in Generation, Transmission, and Distribution sector as well as for
Renovation & Modernization of existing power projects.
The company's clients include state power utilities, central power sector utilities, power departments,
private power sector utilities (including independent power producers), joint sector power utilities, power
equipment manufacturers and power utilities run by local municipalities. These clients are involved in all
aspects of the generation, transmission and distribution and related activities in the power sector in India.
Power FINANCE Corporation Ltd was incorporated on July 16, 1986 as a public limited company. The
GoI established the company as a financial institution in order to FINANCE , facilitate and promote
power sector development in India with the President of India holding 100% of the equity share capital.
In December 31, 1987, they commenced their business operations. In the year 1988, they started
lending activities. In the year 1990, the company was declared as a public financial institution.
In the year 1991, the company was conferred with a license to deal in foreign exchange in the power
sector. In the year 1992, Project on Energy Management Consultation and Training (EMCAT) became
operational with the objective to bring about improvement in the efficiency of the energy supply
component of the power sector with the help of USAID. In the year 1996, the company started funding
private power projects.
In the year 1998, the company was granted the Mini Ratna (Category I) status. They promoted a joint

venture company, namely PTC Ltd in association with NTPC and PGCIL. In the year 1999, the company
launched consultancy services in order to provide consultancy services to both state owned and private
power utilities for the power and financial sectors.
In the year 2003, the company was appointed as a nodal agency by the MoP to fund the India Power
Fund scheme to catalyze the process of fresh equity investment in the power sector. In the year 2005,
the company entered into MoU with LIC and ten leading public sector banks for consortium financing of
power projects. In the year 2006, the company incorporated seven subsidiary companies for developing
UMPPs. They issued the letter of intent for the Sasan and Mundra UMPPs. In the year 2007, they
incorporated their eighth subsidiary company for developing UMPP.
During the year 2006-07, the company launched their IPO and the holding of Government of India
reduced from 100% to 89.78% of the paid-up equity. On successful completion of bidding process, two
of the subsidiaries, Coastal Gujarat Power Ltd and Sasan Power Ltd were to Tata Power Company Ltd and
Reliance Power Ltd on April 22, 2007 and August 7, 2007 respectively. The company was registered as a
Non Banking Financial Company by RBI and was conferred with the status of Nav Ratna by the Govt of
India on June 22, 2007.
During the year 2007-08, the projects, namely Maneri Bhali U-1,3&4 (228 MW) of UTJVNL in Uttaranchal,
Balimela U-7 of OHPC in Orissa and Teesta V HEP U-2 (170 MW) of NHPC in Sikkim, which were
supported by the company were commissioned. The company sanctioned loans worth Rs.190 crore for R
& M and Life Extension of thermal power plants. Also, they sanctioned Rs.222 crore for R&U of Hydro
Power Projects.
In March 2008, the company signed an MoU with RITES Ltd (A Govt. of India Enterprise) to facilitate
import of coal from African countries and elsewhere. Also, they signed an MoU with TNEB whereby PFC
would FINANCE cogeneration projects of around 250 MW planned to be set up at a cost of Rs1200
crore in various cooperative and public sector sugar mills in the state of Tamil Nadu.
In March 25, 2008, the company launched a 100% owned subsidiary company, namely PFC Consulting
Ltd for providing consulting services. Also, they incorporated an advisory company namely Power Equity
Capital Advisors Private Limited to provide advisory services related to equity investments in Indian power
During the year 2008-09, the company established a Consortium Lending Group (CLG) with an aim to
give fillip to Consortium Lending Operations, particularly through the Power Lenders' Club (PLC) which
has 21 members including LIC, HUDCO and 18 Indian banks. The projects in association with the
company, namely Baglihar HEP (3x150 MW) of JKPDCL in Jammu and Kashmir, Priyadarshni Jurala HEP
(6x39 MW) of APPGCL in Andhra Pradesh and Varahi HEP (2x115 MW) of KPCL in Karnataka were
During the year, the company sanctioned loans worth Rs.214 crore for R&M and life extension of thermal
power plants. Also, they sanctioned Rs.48 crore for R&M of hydro power projects. Chhattisgarh State
Electricity Board was reorganized / unbundled into Chhattisgarh State Power Holding Company Ltd.,
Chhattisgarh State Power Generation Company Ltd., Chhattisgarh State Power Transmission Company
Ltd., Chhattisgarh State Power Distribution Company Ltd. and Chhattisgarh State Power Trading
Company Ltd with effect from January 1, 2009. Also, the company in association with NTPC, NHPC and
TCS promoted National Power Exchange Ltd with an authorized capital of Rs.50 crore.
The company was conferred with the coveted 'KPMG-Infrastructure Today Award 2008' for 'Most Admired
Government Enabler - Power' category. They also bagged Dalal Street's 'First DSIJ Award 2009' in the
category of 'Highest Profit Per Employee' and 'India Power Award 2008' for PFC's role and association as
implementation agency with 'Distribution Reforms, Upgrades & Management' (DRUM) Programme of

Government of India (GoI).

During the year 2009-10, the company sanctioned loans worth Rs 1,950 crore for R&M and life extension
of thermal power plants. Also, they sanctioned Rs 74 crore for R&M of hydro power projects. In August
2009, Jharkhand Integrated Power Ltd. for Tilaiya UMPP in Jharkhand has also been transferred on 7th
August, 2009 to Reliance Power Ltd. In November 2009, the company signed a joint venture agreement
with TPC Ltd., Power Grid Corporation of India Ltd. and Rural Electrification Corporation Ltd for
incorporating a Joint Venture Company with equal equity contribution (i.e. 25% each) from all the 4
As on March 31, 2010, the company established twelve Special Purpose Vehicles for UMPPs to undertake
preliminary site investigation activities necessary for conducting the bidding process for these projects.
Ministry of Power is the 'facilitator' for the development of these UMPPs while Central Electricity Authority
(CEA) is the 'Technical Partner'. These SPVs shall be transferred to successful bidder(s) selected through
Tariff Based International Competitive Bidding Process for implementation and operation.
During the year 2010-11, loans worth Rs 556 crore were sanctioned for R&M and life extension of
thermal power plants and an amount of Rs 562 crore was disbursed. Also, they disbursed Rs 83 crore for
R&M of hydro power projects. In July 28, 2010, RBI classified the company as an Infrastructure Finance
Company (IFC).
In October 2010, the company signed an MoU with NPCIL, the only player in nuclear power generation in
India, for offering financial assistance to NPCIL for their new power projects as well as renovation,
refurbishment arid life extension projects etc.
During the first quarter of financial year 2011-12, the company made a Further Public Offer (FPO) of
22,95,53,340 equity shares of Rs 10 each. The issue included a fresh issue of 17,21,65,005 equity shares
by the Company and an offer for sale of 5,73,88,335 equity shares by the President of India acting
through Ministry of Power, Government of India.
In March 30, 2011, the company incorporated a wholly-owned subsidiary company namely Power Finance
Corporation Green Energy Ltd to provide financial support for generating green (Renewable and Nonconventional sources of) energy. In July 18, 2011, they incorporated a wholly owned subsidiary, PFC
Capital Advisory Services Ltd to syndicate and make financial arrangements for the Projects/ enterprises
in the areas of power, energy, infrastructure and other industries.
Rural Electrification Corporation Limited (REC) is a leading public Infrastructure Finance
Company in Indias power sector. The company finances and promotes rural electrification projects
across India, operating through a network of 13 Project Offices and 5 Zonal Offices, headquartered
in New Delhi. The company provides loans to Central/ State Sector Power Utilities, State Electricity
Boards, Rural Electric Cooperatives, NGOs and Private Power Developers.
REC is a Navratna Company[2] functioning under the purview of the Ministry of Power Government
of India. The company is listed on both National Stock Exchange of India and Bombay Stock

The company is currently among the top 500 Global Financial Services brands by UK-based
plc Brand Finance (Brand Finance @ Global Banking 500 for 2010).[3] The company is also among
the Forbes Global 2000 companies for 2010.[4]

1 Business Operations[5]
o 1.1 Services Provided
o 1.2 Projects
o 1.3 Resource Mobilisation
o 1.4 IPO & FPO
2 History[8]
o 2.1 Time-line
o 2.2 Early years
o 2.3 Post-Liberalized India (1990s)
o 2.4 2000Current
3 Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
o 3.1 Rural Electrification Status
4 Central Institute for Rural Electrification (CIRE)[16]
5 Subsidiaries
6 Energy Efficiency Services Limited (EESL)
7 Indian Energy Exchange (IEX)
8 Recent Awards
9 References
10 External links

Business Operations[5][edit]

ICICI Prudential Banking and Financial Services Fund - Retail

Type: Open Ended
Fund Manager: Venkatesh Sanjeevi

Launch Date: August 22, 2008

Fund Size (in Crore): 209.2 as on November 30, 2012

(in ): 5000

It is an Open-ended equity scheme that seeks to generate long-term capital appreciation

to unit holders from a portfolio that is invested predominantly in equity and equity
related securities of companies engaged in banking and financial services. However,
there can be no assurance that the investment objective of the Scheme will be realized.
The Net Asset Value (NAV) for the scheme is 22.52 as on December 21, 2012. The 52
week high value of the scheme is 22.86 as on December 19, 2012 and 52 week low
value was 13.24 as on Deccember 30, 2011.
Since its inception, the Risk Return Value (RRV) has been 20.60 percent and for the
month has been 7.75 percent. The Earnings Per Share (EPS) is 15.90 as on November
The top holdings are HDFC Bank, ICICI BANK, State Bank of India, IndusInd Bank,
Mahindra & Mahindra Financial Services, Union Bank Of India, Oriental Bank of
Commerce, Yes Bank, Federal Bank and ING Vysya Bank.

RECs business model spans across the value chain of power infrastructure financing including
(a) equipment finance,
(b) technical/ financial appraisal of project,
(c) project finance as well as short term or bridge loans for generation, intensive electrification,
transmission, distribution, repair and maintenance,
(d) support functions like project monitoring, consultancy and advisory.
The company operates autonomously as a Central Public Sector Enterprise under the Ministry of
Power,[6] Government of India and also acts as nodal agency for expansive Government of India
schemes for building electricity infrastructure.
Business operations in India are supported by a network of 19 offices headquartered in New Delhi.

Services Provided[edit]
The company is primarily engaged in providing finance for rural electrification projects across India
and provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric
Cooperatives, NGOs and Private Power Developers. The company sanctions loan as a sole lender
or co-lender or in consortium with or without the status of lead financer. It also provides consultancy,
project monitoring and financial/ technical appraisal support for projects, also in the role of nodal
agency for Government of India schemes or projects.

REC finances all types of Power Generation projects including Thermal, Hydel, Renewable Energy,
etc. without limit on size or location. The company aims to increase presence in emerging areas like

de-centralised distributed generation (DDG) projects, and new and renewable energy sources to
reach remote and difficult terrains not connected by power grid network.
In Transmission & Distribution (T&D), REC is primarily engaged in ascertaining financial
requirements of power utilities in the country in the T&D sector along with appraising T&D schemes
for financing. REC has financed T&D schemes for system improvement, intensive electrification,
pump-set energisation and APDRP Programme. The company is also actively involved in physical
as well as financial monitoring of T&D schemes.
REC also offers loan products for financing Renewable Energy projects. The company has tied up
a line of credit for 100M (approximately 6000M) with KfW under Indo-German Development
Cooperation for financing renewable energy power projects at concessional rates of interest. Eligible
projects include Solar, Wind, Small Hydro, Biomass Power, and Cogeneration Power & Hybrid

Resource Mobilisation[edit]
REC raises funds through various domestic and international sources, including Commercial Banks,
Capital Gain Tax Exemption Bonds, Non-Priority Sector Bonds & Commercial Paper, and Official
Development Assistance loan from international agencies. International collaborations have included
past tie-ups for External Commercial Borrowings with Standard Chartered Bank (London), DEPFA
Investment Bank Limited (Cyprus)[7] etc. as well as current tie-ups with KfW (Germany) and Japan
International Cooperation Agency(Japan) under Official Development Assistance. As an IFC, REC
can also issue Infrastructure Bonds and raise funds up to US$500M through External Commercial
Borrowing in a year.
Domestic debt instruments of REC are assigned the highest rating "AAA" by reputed credit rating
agencies CRISIL, Fitch and ICRA. Moodys and Fitch have rated its international credit rating at par
with Indias sovereign rating.

IPO & FPO[edit]

The Company was listed on the National Stock Exchange of India and the Bombay Stock
Exchange on 12 March 2008. REC went for Initial Public Offer of 156,120,000 Equity Shares in
February 2008 which was oversubscribed by about 27 times, raising a total amount of 819 crores.
Further Public Offer of 171,732,000 equity shares was made in February 2010. The issue was
oversubscribed by 3.14 times, raising a total of 26.47 billion