# Power Finance Corporation

Power Finance Corporation Ltd. (PFC) is an Indian public sector company engaged in infrastructure finance activities. Established in 1986, it provides financing for the Indian power sector and is under the admistrative control of the Ministry of Power, Government of India. PFC was classified as a 'Maharatna' enterprise on 12 October 2021.
Initially wholly owned by the Government of India, the company issued an IPO 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) 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 Government of India 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 borrowings (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.
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 the 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), with NTPC, Powergrid and REC being the other promoters. EESL 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 CO$_2$ per year.

## Awards & recognitions

| 1 | MOU Excellence Award 2009-10 | January 2012 |
| 2 | KPMG-Infrastructure Today Award 2011 | December 2011 |
| 3 | Dainik Bhasker India Pride PSU Award 2011 | October 2011 |
| 4 | SCOPE Commendation Certificate 2009-10 | April 2011 |
| 5 | Global HR Excellence Awards 2011 | February 2011 |
| 6 | KPMG-Infrastructure Today Award 2008 | December 2008 |
| 7 | India Power Award 2008 | November 2008 |
| 8 | Golden Peacock Award 2007 | September 2007 |
| 9 | Navratna Company | June 2007 |
| 10 | Maharatna Status | 12 October 2021 |
| 11 | Probable Bonus share | March 2022 |