Power Finance Corporation Q2 profit zooms 33%, to set up $1 bn fund with Tata Capital

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SummaryPower Finance Corporation today reported 33 per cent jump in net profit to Rs 1,084 crore for the July-September quarter

State-run Power Finance Corporation today reported 33 per cent jump in net profit to Rs 1,084 crore for the July-September quarter (Q2), helped by higher lending rate and increase in loan assets.

Looking to diversify its activities, the PSU is in talks with Tata Capital for setting up a USD 1-billion private equity fund, which is expected to be finalised in next "three to six months".

Power Finance Corp (PFC) Chairman and Managing Director Satnam Singh said total income stood at Rs 4,190 crore in the latest September quarter. In the year-ago period, net profit was at Rs 812 crore while total income was Rs 3,150 crore.

Loan assets rose by 28 per cent to Rs 1,40,819 crore in the July-September quarter compared to same period a year ago.

On the PE fund, Singh said the company would have 49 per cent stake in the fund while the remaining shareholding would be with Tata Capital.

"The fund would be around USD 1 billion but initially we would pump in USD 300 million," he told reporters here.

PFC has sanctioned Rs 2,200 crore to Videocon for development of oil and gas assets in Mozambique. This loan is a kind of overseas foray for the company, Singh said.

Videocon's oil fields in Mozambique are likely to start production in the next three years.

Meanwhile, he said the viability of the domestic power sector is being assessed vigorously.

The lender has sanctioned about Rs 19,000 crore to distribution companies in six states, including Tamil Nadu, Rajasthan, Uttar Pradesh, Haryana and Punjab.

Out of the total amount, around Rs 5,000 crore has already been disbursed, Singh said.

Shares of the company closed down 1.81 per cent at Rs 186.90 on the BSE.

PFC, which is also the nodal agency for ultra mega power projects in the country said that site for another UMPP in Jharkhand has been finalised.

"The site at Husainabad, Deoghar district has been finalised, Ministry of Environment and Forests has given its terms of reference, water linkage is in place and studies would begin soon," Singh said.

From the date of start of studies to the invitation of initial bids, the process takes about 3-6 months. However, the company is awaiting the finalisation of revised bidding norms to go ahead with the procedure.

"To bring out the RFQ or the Request For Qualification for this (Husainabad) UMPP it will take about 3-6 months but we are waiting for the new SBDs or the standard bidding documents," Singh added.

PFC has set up a wholly owned subsidiary Deoghar Mega Power Limited.

CEA has already requested Central Mine Planning & Design Institute Limited (CMPDIL) to suggest captive coal blocks in Rajmahal or nearby coalfield for the proposed UMPP.

Based upon the recommendation of CMPDIL, Ministry of Coal will be approached for allocation of coal block.

The first such project in the state is coming up near Tilaiya village in Hazaribagh and Koderma Districts. The project was awarded to Reliance Power in 2009.

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