Companies

PFC to launch $1 b private equity fund

The Power Finance Corporation (PFC), one of the Navratna PSUs that lends funds to power units in public and private sectors, has decided to launch a private equity fund with $1 billion.

The proposal was approved at a meeting of the corporation's board of directors held for the first time in Ahmedabad on Wednesday.

PFC Chairman and Managing Director Satnam Singh said the fund was expected to be launched within six months with an initial capital of $300 million and the board approved to start a process for selecting a private Indian partner for the fund in the interim period.

After selecting the partner, PFC would constitute a trust and an Asset Management Company (AMC) in the next six months and PFC would contribute to the proposed trust about 5 per cent of the funds. Mr. Singh said PFC would soon launch a tendering process for selecting the Indian partner having expertise in fund management and the PFC's experience in lending to the power sector was expected to create synergy for the proposed equity fund.

Replying to questions, Mr Singh said the corporation would soon engage a consultant to seek advice whether PFC should launch a bank or maintain its present status as a NBFC entity. Expecting to raise about Rs.12,000 crore, including Rs.6,900 crore from infra bonds, and Rs.5,000 crore from tax free bonds, PFC had so far been able to raise Rs.425 crore from tax-free bonds and Rs.90 crore from infra bonds in the first tranche, Mr Singh said.

Announcing the PFC's quarterly results, Mr Singh reported a 40 per cent decrease in profit after tax in the last quarter but 25 per cent increase in comparable profit after tax while its interest income increased by 25 per cent compared to the comparable profit after tax of the second quarter of the last financial year.

Mr Singh said more than 65 per cent of the PFC's total loans go to the power projects in the State while 28 per cent go to the Central sector power projects and only 7 per cent lending go to the private sector power companies.


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Printable version | Oct 20, 2021 4:35:39 AM | https://www.thehindu.com/business/companies/pfc-to-launch-1-b-private-equity-fund/article2612732.ece

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