Attended the chaotic AGM as usual due to notorious gift seekers of Delhi in garb of shareholders after wasting half a day in grinding traffic yet was important due to recent SC judgement. Queries though we're nicely answered by PFS.
1) as per them not much impact on PFS of recent SC judgement. Only 3 projects impacted but all of them has tapered linkage from CIL for next few years so they foresee no asset quality concerns. In fact one affected player IMFA prepaid the complete loans a few days back.
2) they have 6000-6500 cr disbursal target from current year.
3) They may have to raise equity next year.
4) Demand is good specially for renewable energy loans with lot of quality players like GS , IFC pitching in with equity and coming to PFS for loan portion. Opp size huge in this sector of 2-2.25 lac crore .Cost is also now coming down from 10-11 cr per MW to 7-7.5 Cr per MW.
Renewable now 33% of cumulative sanctioned amount wile it's 38% in outstanding PF n going to increase in future as well.
5) PFS unlike its govt sounding name is a private sector entity thanks to parent PTC equity structure where PSU stake is limited to only 16% n that too through 4 PSU . There are only 38-40 employees n most of them in the 30-32 age group.
6) crisil has given very high rating to PFS for both short n long term period. Pfs is able to raise loans from PSB n FIs at v competitive 10-10.25% base rates.
7) transmission network in TN is now stable n the wind farms there are able to offer the power to private secto too there vs to monopoly govt sector earlier.
8) all credit appraisal is done in house under a ex PWC CA who heads the risk deptt n he has veto power on all projects.
8) around 2000 cr sanctioned loans were cancelled due to lack of progress .
9) lot of state govts proactive in renewable energy like Gujarat, Maharashtra, AP,Raj n tariff being offered is now v competitive 5-5.7 Rs in wind n 7 Rs in solar sector.
10) No equity sale envisaged in current fin year.
11) PfS has no dividend policy but expected to maintain similar div payout ratio in future as well.
12) a separate co being planned for equity investments n likely to be formed in FY 15.