Power Finance Corporation conducted a conference call on 17 August 2017 to discuss its financial results for the quarter ended June 2017. Rajeev Sharma, Chairman and Managing Director of the company addressed the call:

Highlights:
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• The net loan assets of the company increased 10% to Rs 247139 crore at end June 2017 over June 2017. The company has posted strong 66% growth in disbursement to Rs 12849 crore, while sanctions also jumped 47% to Rs 50922 crore in Q1FY2018
  
  
• The disbursements in the renewable segment have jumped to Rs 1200 crore in Q1FY2018 from Rs 236 crore in Q1FY2018.
  
  
• The company expects the strong growth in renewable energy and transmission and distribution as well as refinancing would support the loan growth.
  
  
• However, the company has exhibited competitive pressure on margins with NIMs moderating to 4.44% and spreads to 2.76% in Q1FY2018. With the substantial amount of repricing of loans (60% of total loans) already behind, the company expects to maintain spreads at current level, going forward.
  
  
• The overall NPA provisions stood at Rs 251 crore in Q1FY2018, of which Rs 210 crore related to existing NPAs. The provisions for standard assets stood at Rs 46.28 crore, restructured advances Rs 94.62 crore and diminution in fair value of investment at Rs 20.49 crore in Q1FY2018.
  
• Three loans assets having aggregate balance of Rs 383.37 crore have been classified as NPA in Q1FY2018. The account of Essar Power with the exposure of Rs 382 crore has slipped to NPA in Q1FY2018 due to delay in commissioning and cost-overrun, where bank has made provision of Rs 38 crore. The company has also made provision of Rs 2 crore for two small accounts of J&K State Power.
  
  
• The company has maintained the asset quality stable with GNPA at 12.46% and NNPA at 10.48% end June 2017. The company is following RBI prudential norms on NPA recognitions.
  
  
• The Gross NPAs of the company stood at Rs 31498 crore, of which Rs 23363 crore were in the public sector end June 2017. As per the company, NPA reversals to standard category in the public sector accounts have started, while it has upgraded NPAs relating to MP Genco of Rs 11000 crore on 15 July 2017 and expects further upgradations of NPA account of Marwa Chhattisgarh with the exposure of Rs 7000 crore in Q3FY2018.
  
  
• The restructured loan of the company stood at Rs 54595 crore, consisting of Rs 36505 crore in the public sector and Rs 18090 crore in private sectors.
  
  
• One public sector restructured account with the exposure of Rs 1500 crore was upgraded in Q1FY2018, while increase in the outstanding was on account of fresh disbursement. Of the restructured public sector assets of Rs 36505 crore, about 62% or Rs 22511 crore are already commissioned, 26% of 9530 crore are scheduled for commissioning in FY2018 and 12% or Rs 4465 crore are scheduled for commissioning after FY2018.
  
  
• The public sector accounts in the NPA as well as restructured category are well serviced and the company does not see any stress in the public sector loans.
  
  
• In the private sector restructured assets, the account of NCC Power with the exposure of Rs 2400 crore was upgraded, while the Ciga Energy with the exposure of Rs 523 crore was restructured in Q1FY2018. Of the private sector assets of Rs 18090 crore, about 31% or Rs 5576 crore are already commissioned, Rs 4371 crore are scheduled for commissioning in FY2018 and Rs 1205 crore after FY2018.
  
  
• The company has exposure of Rs 1.86 trillion (89790 mw) to generation sector out of total loans of Rs 2.53 trillion. The public sector loans accounts for 80% of total generation loans (of which 75% are commissioned), while balance 20% is to private sector (with 55% already commissioned). Thus, about 70% of total generation exposure is already commissioned, while 16% is scheduled for commissioning in FY2018.
  
  
• The company has completed fresh fund raising of Rs 13618 crore at the marginal cost of 7% in Q1FY2018. The company has received permission for fund raising through Capital Gains Tax bonds and has launched the issue at the rate of 5.25%.
  
  
• The Capital Adequacy Ratio of the company was comfortable at 19.54% end June 2017.
  
  
• The company has robust appraisal policy and follows highest standard in appraising fresh loans.