Power Finance Corporation Ltd. (PFC) is an Indian

public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, pu ...

company engaged in infrastructure finance activities. Established in 1986, it provides financing for the Indian power sector and is under the administrative control of the Ministry of Power,

Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...

. PFC was classified as a '

Maharatna Public Sector Undertakings (PSU) in India are government-owned entities in which at least 51% of stake is under the ownership of the Government of India or state governments. These types of firms can also be a joint venture of multiple PSUs. ...

' enterprise on 12 October 2021. Initially wholly owned by the

, the company issued an

IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

in January 2007. The issue was oversubscribed by over 76 times, which is one of the largest for an IPO of any Indian CPSU. PFC is listed on the

Bombay Stock Exchange BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange based in Mumbai. It is the 6th largest stock exchange in the world by total market capitalization, exceeding $5 trillion in May 2024. Established with t ...

(BSE) and the National Stock Exchange (NSE). It is also an ISO 9001:2000 certified company and enjoys the status of Maharatna PSU in India. On 6 December 2018, the

approved PFC's takeover of REC. The acquisition transaction was completed on 28 March 2019 with PFC paying almost Rs. 145 million to the government of India for the 52.63% stake.

Organization structure

The corporation is headed by the chairman and managing director, who at present is Parminder Chopra. The company has three wings, each headed by a Functional Director: the Commercial Division, Projects Division, and Finance Division. The Commercial Division is responsible for credit appraisal, categorization of borrower entities, power sector reforms, review, and analysis. The Projects Division oversees operations in various states and project appraisal. The Finance Division manages Fund Mobilization and Disbursement. PFC is a lean organization with approximately 550 employees as of 31 March 2023.

Borrowings

Most of the PFC's funds are raised through rupee-denominated bonds, which have the highest credit rating in the Indian market and in international markets, rated at par with the Indian sovereign rating. It also borrows short term and long term from various banks and other financial institutions, and raised

external commercial borrowing External commercial borrowing (ECBs) are loans in India made by non-resident lenders in foreign currency to Indian borrowers. They are used widely in India to facilitate access to foreign money by Indian corporations and PSUs (public sector undert ...

s (ECB) through private placement in the US market. PFC is one of the institutions eligible for raising funds through capital gain tax bonds under section 54EC of the

Income Tax Act, 1961 The Income Tax Act, 1961 is the charging statute of income tax in India. It provides for the levy, administration, collection, and recovery of income tax. The Government of India brought a draft statute called the Direct Taxes Code intended ...

. Over the last two-three years, PFC has focused on diversifying its borrowing portfolio by raising funds from international markets. In November 2017, PFC launched its main Green Bond issue for US$400 million, which witnessed the tightest ever spread for any Indian Issuer for its maiden 10-year issue. In the first quarter of the Financial year 2020, PFC has raised about US$1.3 billion from the international markets. Out of this US$1 billion was raised in June 2019, which was the first dual and largest USD bonds transaction for Govt owned Indian NBFC. This was also PFC's first borrowing from the international markets after the successful acquisition of REC Limited. In 2017, PFC was granted approval by the Ministry of Finance, Govt. of India, to raise funds under section 54EC of the Income Tax Act 1961. PFC was the first company to obtain such approval post the budget announcement in February 2017. PFC has raised more 14.7 million dollars under these bonds since their launch in 2017.

Operations

Since its inception, PFC has been providing financial assistance to power projects across India including generation, transmission, distribution and RM&U projects. Recently, it began financing other infrastructure projects which have backward linkages to the power sector like coal mine development, fuel transportation, oil & gas pipelines, etc. The borrower profile includes State Electricity Boards, State sector power utilities, Central sector power utilities and Private sector companies. PFC is also the nodal agency for the implementation of the ambitious Ultra Mega Power Plants (UMPPs) and th
R-APDRP
program of Govt. of India. The company also has the mechanism of rating different state Power Utilities on its performance.

Subsidiary and Associate Companies

PFC presently has ten subsidiaries, seven of which are SPVs (shell companies) to implement the UMPP project: * PFC Consulting Ltd. (PFCCL) is a wholly owned subsidiary handling fee based services. * Orissa Integrated Power Limited * Coastal Karnataka Power Limited * Coastal Tamil Nadu Power Limited * Coastal Maharashtra Power Limited * Jharkhand Integrated Power Limited * Akaltara Power Limited After the purchase of the entire holding of the Govt. of India in Rural Electrification Corporation Limited, became a subsidiary of PFC in the fiscal year 2018–2019. PFC is also one of the promoters in Energy Efficiency Services Limited (

EESL Energy Efficiency Services Limited is a joint venture of state-run power companies, responsible for implementation of the Unnat Jyoti by Affordable LEDs for All scheme, formerly known as the Domestic Efficient Lighting Programme. It has reduce ...

), with NTPC, Powergrid and REC being the other promoters.

is currently implementing of world's largest energy efficiency portfolio and has been instrumental in energy savings of more than 50 tWh/year and an estimated GHG reduction of more than 40 million tonnes of CO₂ per year.

Awards & recognitions

Notes

External links

* {{authority control Government-owned companies of India Indian companies established in 1986 Financial services companies of India Companies based in New Delhi Electric power in India 1986 establishments in Delhi Companies listed on the National Stock Exchange of India Companies listed on the Bombay Stock Exchange