Hydropower major NHPC is exploring the possibility of parking a part of its Rs 5,000 crore cash reserves into mutual funds to optimise its income, company chairman SK Garg said on Tuesday. However, he added the company is yet to take a final decision in this matter.
Following guidelines from the finance ministry, the company has invested its surplus fund in PSU bonds and government securities. Besides, it has also deposited some money with banks to take care of its cash requirement. Though these financial instruments do not offer attractive returns, they are liquid and less risky. That is the reason the company is looking at investing some of the cash surplus into mutual funds. “We are looking at a return of at least 7%,” Garg said while briefing media on highlights of NHPC’s performance in the financial year 2009-10.
NHPC’s net profit surged 94.43% to Rs 2,090 crore in the financial year 2009-10. The unusual rise in net is mainly because of arrear payment from electricity buyers following determination of final tariff for its power plants like Dulhasti, Chamera-II and Teesta-V by the central electricity regulatory commission (CERC).
Under a provisional arrangement, the company was billing buyers of electricity from these plants at a tariff which was 15% lower than the final fixed by the CERC. “The company achieved highest ever net profit of Rs 2,090 crore,” NHPC chairman SK Garg said while sharing highlights of the company’s performance during 2009-10 in an annual press conference here. In comparison, the public sector generator had reported net profit of Rs 1,075 crore in the fiscal 2008-09. Because of arrear payment, the company’s turnover surged 58% to Rs 4,218 crore. During the period, the company generated 16,960 million units of electricity against the target of 16,381 million units set by the power ministry.