00:00 Hello and welcome to BQ Prime. You're joining us on this special broadcast where we are joined with
00:05 Ms. Parminder Chopra, CMD of Power Finance Corporation. Our Power Finance Corporation is
00:11 coming out with a series of NCD issuance. The company is looking to raise about 5000 crores
00:17 through these issuances. And as part of this issuance, I wanted to talk to Ms. Chopra.
00:23 Thank you. Thank you so much, ma'am, for joining us on this conversation.
00:27 First question I wanted to get sense from you on this 5000 crore fund raise. What is the return
00:32 expectation that investors can look at? See, I think they can get a better return than the
00:39 fixed deposits and other sources if you see because it's a fixed rate interest for a period of
00:45 three ranging from three to 15 years. We have issued, we are proposing to issue three tranches,
00:54 three, 10 and 15 year ranging from 750 to 755 percent per N. Okay. Coming to the issuance
01:04 itself now, you're coming to the public after a gap. I mean, you've largely been tapping the
01:09 private market. I just wanted to get a sense as to why you chose to do this in public NCD issues
01:16 at this stage. PFC's maiden public issue has been launched in 2021. So, at that point of time also,
01:24 we want to meet public at large to partner the funding requirement and power sector growth
01:32 story of India. You know, power sector is going through a transition phase. We are talking from
01:38 switching over from fossil fuel based to non-fossil fuel based. Energy transition is being talked
01:44 about. We are talking of the new technologies, be it hydrogen, offshore wind, waste to energy,
01:50 and also looking at the increasing requirement of power. If we see that we are just at one third of
01:59 the world's consumption, India's population is growing. So, we are expecting to add a double
02:05 R installed capacity by 2030, which requires 31 lakh crore of additional investment in the
02:12 power sector. So, there is no dearth of money in the, I think, in the private placement also,
02:20 but we thought public at large to involve in the, to partner for the India's growth story.
02:26 Okay. Ma'am, I wanted to ask you a little bit about the reasons for the utilization of these
02:32 funds. Obviously, you're going to be on lending, but apart from that, what else is PFC planning
02:37 to be 5,000 crore? See, it could be on lending, refinancing, or for the general corporate purpose.
02:44 And we will go as per the SEBI guidelines, which talks that not more than 25 percent can be used
02:52 for debt servicing. So, we will abide by that. Okay. Coming to the company, there was some news
03:00 items which talked about PFC looking at the road financing also to sort of diversify the portfolio
03:06 that exists at this point in time. Can you tell us a little bit about that? See, PFC has been
03:11 primarily funding for the, rather if you say till last year, we were allowed to fund only for the
03:17 power sector in India. In mid of last financial year, the government of India has given us
03:23 approval for limited funding for the infrastructure sector to expand our footprints beyond power
03:29 sector. And if I say that there are a number of sectors which are quite close to the power sector,
03:37 there are a major portion is towards the, you can say, the power and its allied activity funding
03:43 were required. So, we were looking for funding such projects and that is why in the mid, the
03:50 government of India has allowed for the infrastructure. Now, the whole of the infrastructure
03:54 sector is open to PFC. So, going forward, we will be funding for all these new areas. We,
04:04 last year, we have sanctioned for the ports, refineries, metros, and approximately 16,000
04:12 crore proposals were sanctioned in the second half of the last financial year.
04:17 Okay. And what is the ideal mix of portfolio that, according to you, works best for PFC?
04:24 See, for that, we will remain as the primary lender for the power sector. And as per the
04:30 mandate given to us, we can take only one third of the exposure to the infrastructure sector.
04:37 A third of your book?
04:39 Yeah.
04:39 Okay. I want to talk to you about the power sector as well. So, you know, one point that
04:46 people in the newsroom discuss beta sectors and one of the discussion points was that powers
04:52 sort of going to now take off, you know, some of the developments in the sector you mentioned
04:57 earlier. But I just wanted to get a sense as to as a lender, when you're looking at the sector,
05:02 what is exciting?
05:04 See, I think the financial position and financial turnaround of the discoms, which is the most
05:14 exciting part of this time story for the power sector. So, a lot of work is being done to make,
05:21 especially the discom sector viable. As you know, the discom is the last leg in the power sector
05:27 and any impact on the financial health of the discom will have an overall impact on the power
05:33 sector, be it the generator, be it the lenders, everyone will be affected by that. So, that is
05:38 the most exciting part. We have, the government of India has launched the RDSS scheme. RDSS scheme
05:46 aims at the turnaround of the discom sector, where a customized solution, you can say,
05:53 has been given to each and every state to reduce its losses in the scheme. And I think an ambitious
06:04 program of installation of the prepaid smart meters, which has been taken up by the government
06:11 of India, Ministry of Power, is going to be the game changer for the power sector.
06:16 You know, there was another scheme, LPS scheme, where all the legacy dues have been allowed to
06:24 carry forward without LPS and are allowed to be repaid in equal monthly installments. So,
06:32 there also the progress is, I think, appreciable in the sense that all the current dues are being
06:40 paid on time. If we see that only one or apart from varying one or two utilities, none of them
06:49 were regulated at one point of time, there were more than 20 entities which were regulated.
06:56 But of late, it is, if at all it is there, it is only for one or two days. So, all dues are being
07:02 paid in time in the power sector by the discoms to the generators that helps to maintain the
07:09 liquidity and financial health of the sector. In terms of new projects, what is the outlook
07:14 looking like for the power sector as a whole? See, renewable space is definitely in line with
07:23 the government of India vision and the need of the hour that is the first priority for
07:30 PFC for funding, be it solar, be it wind, or if we are talking of the equipment manufacturing for
07:39 the solar and wind, also, we are funding for the waste to energy or the energy transition projects.
07:47 So, we are open to fund for all those. And we are partnering government of India in its endeavor to
07:56 revamp the distribution sector. There also, 1,20,000 crore that is 40% of the scheme is there,
08:04 where the funding opportunities are available to PFC group. So, this is over and above the
08:10 infrastructure space we already have. Okay. Just as a last question, I wanted to get a sense from
08:18 you as to what your outlook for the loan book is looking like for this FY24. Are you expecting a
08:27 certain amount of growth as far as your loan is concerned? I have shared with you the opportunities
08:35 available. We are looking at a 31 lakh crore funding requirement for the power sector till 2030.
08:41 Apart from that, if we talk of the net zero, then 10 to 20 trillion of US dollar is required,
08:48 of which 80% is required only for the power sector. So, a lot of funding opportunities
08:54 are available in the power sector, in the infrastructure sector. And last year,
09:00 our book has grown by 13%. And we would like to tap wherever possible the opportunities.
09:07 You'd like to maintain that? Maybe outperform? I know, I can't ask you a lot of questions about
09:13 that. A lot of opportunities are available. And as of now, also, we have been funding for,
09:21 we have supported 50% of the installed capacity. This I can share with you.
09:25 Thank you so much for joining us on this conversation. Thank you. Thank you very much.
09:38 [BLANK_AUDIO]
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