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Power Finance Corporation on Tuesday said it has no plan to launch a follow-on public offer (FPO) in near future.
“It is clarified that PFC is not planning to launch any such FPO in the near future. Also, it is highlighted that as on June 30, 2020, PFC’s capital adequacy ratio is at 17.32 per cent with tier I capital of 13.11 per cent. Thus, we have sufficient cushion available over the regulatory limit of 15 per cent,” PFC said in a statement to the BSE.
“Also, lending by PFC under Discom Liquidity package, will give us the benefit of lower risk weight on account of State government guarantee. This will help in leveraging our capital more efficiently. Given the current capitalisation profile, we believe PFC’s capital levels are adequate to take care of our asset side risks and future growth. Therefore, PFC is not envisaging any requirement for capital augmentation at the moment,” PFC added.
Infra bonds: No new buyback
On buy back of infrastructure bonds, it said, “There has been some information circulating in the market regarding launch of buyback/exit option... as of now, PFC has not introduced any new buyback/exit option nor has it appointed any agency to offer such buyback/exit option.”
“Therefore, the buyback/exit option as per the existing terms & conditions of bonds issue will continue. Further, there will be no impact on principal & interest servicing of these bonds. As per our understanding, the secondary market purchase has been initiated by Lotus Securities. Therefore, investors are advised to exercise due caution while dealing with such a type of communication,” the statement added.
Responding to concerns about being able to enhance funds to cover dues of State Electricity Boards till June 2020, PFC said, “In September 2020, the Government has allowed enhanced funding to Power Distribution Companies (Discoms) for clearance of their outstanding dues as on June 30, 2020. The lending for the enhanced portion will be co-funded by PFC & its subsidiary REC equally.
“We expect that in near future additional fund requirement would be around ₹30,000- 35,000 crore. PFC is adequately placed on the liquidity front in this financial year as well, raising almost ₹58,000 crore from the domestic markets at competitive rates, including ₹11,000 crore for the liquidity injection package,” PFC said.
“Also, more than 70 per cent debt obligation requirement has already been met for the financial year. Considering PFC’s high creditworthiness and availability of diversified funding avenues, we believe that PFC would be able to comfortably mobilise these resources from the market,” the lender added.
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