The Telegraph
Since 1st March, 1999
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PFC plans Rs 100cr public offer

New Delhi, Oct. 17: State-run Power Finance Corporation (PFC), a financial institution that lends to power sector concerns (mainly state electricity boards), plans to raise Rs 100 crore through an initial public offer (IPO).

“We have not yet decided on the share premium; the valuation process is on. It will take another three to four months and the necessary Sebi clearance will take another month or so,” the official said.

The official said the firm was keen on an early IPO but in view of the major logjam in the divestment process of state-run firms the company is on a “go-slow” process and has now slated the IPO for early next fiscal (2003-04).

Analysts say that since PFC clients are mainly state electricity boards (SEBs), the firm’s asset quality in the long run will depend on the financial health of the SEBs, despite state government guarantees and escrow account arrangements

Two other financial institutions—IFCI and IDBI—are already burdened with huge non-performing assets of around 20 per cent and have recently requested a Rs 8,500-crore and Rs 5,000-crore revamp package respectively from the government.

Company officials say PFC is unlikely to head in the same direction since the government views PFC as a tool in furthering its power sector development and reforms.

PFC’s profits for 2001-02 stood at Rs 778 crore up from Rs 604 crore in the year-ago period. The firm had declared a dividend of Rs 200 crore (2001-02). Advances for the year 2001-02 stood at Rs 5,150 crore against sanctions of Rs 8,500 crore.

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