PFC to launch Rs5,000-cr NCD issue on Jul 21

Mumbai State-owned Power Finance Corporation (PFC) will launch the Rs5,000 crore-worth issuance of Non Convertible Debentures (NCDs) on July 21. The power sector lender is also awaiting Reserve Bank of India’s (RB) nod to set up a subsidiary at the International Financial Services Centre (IFSC) in Gandhinagar. The issue, part of the Rs10,000 crore-funding raising plan approved by its board, will have three tranches of 3, 10 and 15-year tenor offering an annualised coupon rate of 7.45 to 7.55 per cent. It will consist of Rs500 crore of primary issue and a green shoe option for Rs4,500 crore.

PFC Chairman and Managing Director Parminder Chopra told reporters here that the issue will open on July 21 and close on July 28 with an option of early closure or extension. The debentures will be listed on the BSE. Three-fourth of the net proceeds of the issue will be utilised for onward lending, financing/refinancing the existing debt, and/or debt servicing and the rest will be used for general corporate purposes. On the proposed IFSC arm in the Gift City, Chopra said she hopes to launch the arm this fiscal itself, subject to getting the regulatory approvals from the RBI and that is taking time.

“In fact, we have been working on this since last year. We being an NBFC (Non-Banking Financial Company), we can’t open branch unit in the IFSC, but only launch a subsidiary,” she told PTI here.

Asked how an IFSC unit will help the company, which is the largest financier of the power sector, and whether they have loan queries from overseas, she said, “we are just testing the waters.”

In fiscal 2023, PFC’s consolidated revenue stood at Rs77,568.30 crore, up from Rs76,261.66 crore a year ago. Its net income stood at Rs21,178.6 crore as against Rs18,768.2 crore in the previous year. As of March 2023, the company’s loan book stood at Rs4.32 lakh crore. Out of the total amount, Rs3.2 lakh crore has been lent to state power companies and Rs73,000 crore to private power companies. For this period, its outstanding borrowing was at Rs3.63 lakh crore, out of which 63 per cent were through domestic bonds.