Power Finance Corporation Limited is an Indian non-banking finance company that specialises in the power sector. It is owned wholly by the Government of India.
The market capitalisation of Power Finance Corporation, as of June 21, 2018, is a little over Rs.21,500 crore.
Company’s Wealth and Recent Performance
- For the fourth quarter of the financial year 2017-18, the company’s standalone revenue from operations was reported to be at Rs.6,162.38 crore. This is a marginal decrease over the revenue reported for the December quarter. However, in comparison to the corresponding quarter of the previous year, this figure has improved by a little over 5%.
- The consolidated revenue from operations for the year ended on March 31, 2018, was stated to be Rs.25,870 crore in contrast to Rs.26,330 crore for the previous fiscal year.
- Despite a marginal reduction in revenue, Power Finance Corporation still managed to generate a healthy profit. This came on account of reduction in total expenses for the period. The profit for the March quarter was revealed to be Rs.935.60 crore which is a significant improvement over a loss of Rs.3,400 crore which was the case in the corresponding quarter last year.
- A similar rise in profit was also seen for the entire fiscal year. The net profit after tax for the year was reported to be Rs.5,844 crore in a sharp contrast to the Rs.2,236.10 crore profit reported for the FY 2016-17.
- The consolidated long-term borrowing of Power Finance Corporation Limited was reported to be worth Rs.1,92,055 crore - an increase of roughly 10% over the previous year. It is worth mentioning that this long-term debt constitutes more than 60% of the overall equity and liabilities.
- The debt-equity ratio, as of March 31, 2018, was stated to be 5.76, in comparison to 5.55 over the previous year.
Power Finance Corporation Limited Stock Trends 2018
- On January 2, 2018, the opening price of Power Finance Corporation shares was Rs.124.95 on the National Stock Exchange. Over the course of the month, the price dipped slightly to enter the Rs.110 region. The closing price at the end of the month was Rs.116.80. A similar decline was observed in the month of February as well. The scrip lost a little over 5% in four weeks, with the closing price on February 28 being Rs.105.
- By early March, the Power Finance Corporation share price was down by 15% with respect to the start of the year. Things didn’t turn around in this month either as the scrip continued to shed points. An interim dividend of 18% was announced early in the month but that didn’t do much to boost investors’ confidence. The shares went down to be traded at levels around Rs.88 for most of the month.
- Things remained fairly same in April as well. The prices varied at levels above Rs.80 but they didn’t make any substantial gains to recover their previous losses. It wasn’t until May that the prices went down again and this time, it reached its 52-week low of Rs.71.05. The closing price on May 31, 2018, was Rs.80.55.
Power Finance Corporation Limited Stock Trends 2016 and 2017
- At the start of January 2016, the share price of Power Finance Corporation Limited was a little over Rs.100. Over the next couple of weeks, the scrip moved on to shed more than 10% to enter the Rs.80 region. Things stayed on the same wavelength in February with the stocks changing hands at levels above Rs.80 in the first half of the month. The second half saw the shares slip into the Rs.70 region and they stayed there for the remainder of the month.
- The prices recovered slightly in March to cross the Rs.80 mark again. Through the months of April and May, the Power Finance Corp stock price varied from Rs.80 - Rs.90. In June, the share price went down by around 3% to be traded at levels around Rs.81. In the final week of the month, the scrip commenced a bull run to close at Rs.84.70.
- The month of July brought a lot of relief to the investors. The share price rose handsomely on the back of bonus issue, dividends, and company developments. By mid-July, the Power Finance stocks had ascended into the Rs.100 region. By the end of the month, the shares were changing hands at levels around Rs.110, thereby reaching their best levels for the year.
- The share price continued to rise in August driven by positive developments in the company. Power Finance Corporation issued bonus shares in 1:1 ratio towards the end of the month which gave the scrip a steady heading. In early September, the share price was varying at levels above Rs.120. Things stayed that way for the entire month of October.
- Post demonetisation in November, the prices went down slightly but they managed to retain their bearings at levels above Rs.110. In early December, the stock price rose superbly once again and this time, they managed to cross the Rs.130 mark. However, the scrip lost these gains just as quickly as it made them. The closing price on December 30 was Rs.121.95.
- On January 3, 2017, the Power Finance Corporation shares commenced trading at Rs.124. Over the course of the month, the price rose steadily to cross the Rs.130 mark again. For the most of February, the share price remained at those levels and the investors continued to enjoy the new gains made by the scrip.
- In March, the shares commenced another bull run and this one continued till mid-May. In this period, the stock price managed to cross the psychological barrier of Rs.150. In fact, it was between late-April and mid-May that the scrip reached its highest value in years, going beyond the Rs.160 mark.
- After reaching these highs, the stock price immediately took a sharp nosedive. By early June, the share price of Power Finance Corporation had descended back into the Rs.120 territory, effectively shedding all its previous gains in less than two weeks. Investors exercised caution in the month of July as the share price remained steadily above the Rs.120 mark. In August, the prices rose sharply but went down just as quickly. This abrupt rise and fall were seen in September as well.
- In the final quarter of the year, the stock price of the company rose once again to reach its previous levels above Rs.145. However, this rally didn’t last for long as the shares quickly retreated back into the Rs.120 region. Throughout November and December, the shares remained at these levels. On December 29, 2017, the closing price of the scrip was Rs.121.75 on the NSE.
Should you invest in Power Finance Corporation Limited?
- Power Finance Corporation Limited is a public-sector undertaking owned by the Government of India. As a non-banking financial company, it provides financial assistance to power projects in the country. However, many of these projects in India are facing insolvency proceedings, that is, they are unable to pay their loans.
- In order to resolve these issues, the Reserve Bank of India has come up with strict norms. PFC Limited will have to consider these norms and attempt to reduce the number of bad loans in their books. In the upcoming fiscal year, its plan is to cut its non-performing asset count by 10%. At the same time, private sector loans worth roughly Rs.17,000 crore are at the risk of being classified as non-performing loans.
- Considering its financial performance, the company reported a profit in the March quarter after reporting a staggering loss in the corresponding quarter of the previous year. However, its long-term debts have increased by 10% over the last year, amounting to Rs.1,92,000 crore. Its debt-equity ratio is also considerably high, standing at 5.76 as of March 31, 2018. This implies that the company has been aggressive in financing its growth with debt.
- Even its stock price has taken a hit with the scrip losing more than 30% since January 2017. However, there may be some hope for the investors as the Government of India is working hard to revive the power sector in India. From a long-term perspective, it may turn out to be a good idea to invest in PFC shares. However, it is strongly recommended that you do your own research before investing.
Power Finance Corporation Limited is a leading non-banking finance company which specialises in the power sector. It is wholly owned by the Government of India and is under the administrative control of the Ministry of Power. PFC Limited enjoys the status of Navratna Company which was conferred to it in June, 2007.
It provides financial assistance and consultancy services to power projects across the country, covering generation, transmission, and distribution aspects. It also provides financial assistance to infrastructure projects which are linked indirectly to the power sector. Power Finance Corporation has been deemed as a nodal agency for the implementation of Ultra Mega Power Projects, Integrated Power Development Scheme, and Independent Transmission Projects.
History of the Company
Power Finance Corporation Limited was incorporated on July 16, 1986 under the Companies Act as a public limited company. The company commenced its lending operations in the year 1988 and eventually formulated its plan to identify areas that require financial assistance. In 1996, the company started funding private power projects and just two years later, the company was registered as a non-banking finance company. In 1999, the company launched its consultancy services, available to state-owned and private power companies. The next decade saw Power Finance Corporation sign MoU with public sector banks, along with listing its equity shares on the stock markets.
Management of the Company
Mr. Rajeev Sharma - Chairman and Managing Director
Mr. Sharma, IAS, has been a part of Power Finance Corporation Limited since October 2016. Prior to joining the company as the managing director, Mr. Sharma served as the Managing Director of Rural Electrification Corporation Limited for a little under five years. He has been in the power sector for more than 26 years now and has held a variety of important positions. Some of his key positions include serving as the Director of Projects at Power Finance Corporation Limited from March 2009 to November 2011. He has also served as the Chairman and Director of Energy Efficiency Services Limited. He holds a B.Tech in electrical engineering, an MBA from the Delhi University and a Master’s degree in electrical engineering from the IIT, Roorkee.
Mr. Chinmoy Gangopadhyay - Director of Projects
Mr. Gangopadhyay became the Director of Projects of PFC Limited in January 2017. He has been a part of the power sector for more than 35 years and has worked with several reputed organisations like National Thermal Power Corporation Limited, Power Finance Corporation, and PFC Consulting Limited (PFCCL). He has been with the PFC group for more than 25 years and over his impressive tenure, he has held several key roles. In addition to this, he has also served as the Director in Jharkhand Infrapower Limited and Odisha Infrapower Limited.
Mr. N.B Gupta - Director of Finance
Mr. N.B Gupta became the Director of Finance, PFC Limited in August 2017. Just like his peers, he has been in the power sector for more than 30 years. He primarily specialises in fields like fundraising, internal audit, international finance, accounts, et cetera. Before his appointment to the position of Director, Mr. Gupta served as the Executive Director of Finance at PFC Limited. He joined the company in 2005 as a Chartered Account.
Power Finance Corporation Limited Listings in NSE, BSE, and Indices
The equity shares of Power Finance Corporation Limited are available for purchase and trading on the country’s major stock exchanges - the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective codes for the same are as follows:
- NSE Code: PFC
- BSE Code: 532810
- ISIN: INE134E01011
- Sector: Finance - Term Lending Institutions
Coming to the stock market indices, the company forms a part of the following:
- NIFTY 100
- NIFTY 200
- NIFTY 500
- NIFTY Next 50
- S&P BSE AllCap
- S&P BSE 100
- S&P BSE 200
- S&P BSE 500
- S&P BSE LargeMidCap
Power Finance Corporation Limited
1, Barakhamba Lane, Connaught Place
New Delhi - 110-001
Contact number: +91-11-23456000s
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