Highlights:

The company by quickly leveraging its technological capabilities, has been able to manage all its operations remotely throughout the lockdown period and business functions have largely remained unaffected due to the COVID-19 lockdown.

The company has made a disbursement of Rs 11,000 crore in the last week of March 20. This, in fact, is more than the disbursement made during similar periods in March 2019.

The Ministry of Power and MNRE have also come up with various measures to ease out the challenges being faced by various power sector entities. Some of them are reduction in late payment surcharge, waiver of fixed charges and interest rate charges ensuring must-run status to renewable energy generation facilities etc.

Further the government has announced a Rs 90,000 crore liquidity package for DISCOMs for which PFC and REC are the key implementing agencies and it will significantly improve the cash flow situation in the sector.

Against PFC portion of Rs 45,000 crore under the DISCOM standard package, PFC has already formulated a scheme for extending loans to DISCOMs. The loans will be extended for a maximum tenure of up to 10 years against the outstanding dues to DISCOM. Such lending will be on commercial terms and conditions and subject to it being backed by state government guarantee. Considering lending is with state government guarantee, it will not have an adverse impact on PFC's capital.

In line with RBI guidelines PFC has provided the moratorium option to its borrowers. Till now moratorium has been extended to approximately 70% of the dues receivable by PFC.

On the liquidity standpoint, PFC's borrowing has been continuing even during the lockdown. Further, during the current FY2021 the company has been successfully able to raise close to Rs 29,000 crore from the domestic market majorly through a mix of bonds and term loans.

Also the company has Rs 10,000 crore of line of credit available from banks and Rs 9,500 crore term loan sanctioned from banks in pipeline. Going forward, the company is confident to have sufficient liquidity levels to fund business operations.

As a responsible corporate the company has contributed Rs 200 crore to the PM CARES Fund.

The net profits of the company stood at Rs 5655 crore. The one-time impact of DTA remeasurement on profit on account of shift to new corporate tax regime stood at Rs 1133 crore.

Annual yield is stable at 10.63%, while the cost of funds has come down by 16 bps to 7.79% from 7.95% in FY19. The spread has also increased by 15 bps from 2.67% in FY19 to 2.83% in FY20. Going forward, the company would be able to maintain financial indicators within this range.

The CRAR for FY20 eased to 16.96% compared to 17.09% in FY19 due to regulatory change by RBI on 13 March 2020 for exclusion of any net unrealized gains on fair valuation of financial instruments from calculation of own funds under CRAR, whereas all such net losses should be considered.

Over the years, the company has been consistently working on resolution of NPA assets and building of sufficient provision buffer. In 3 years, PFC net NPA levels have come down to 3.8% at present, from 7.39% in FY18.

Another positive development this quarter is that the company has reached resolution in RS India loan of Rs 224 crore, which is a 41-megawatt wind project. The company already has maintained sufficient provisioning against this project.

Coming now to the resolution status of other 28 projects, currently 16 projects of Rs 16138 crore have been resolved through NCLT, and the remaining 12 projects of Rs 11511 crore are being resolved outside NCLT.

The 6 projects are near to resolution prior to COVID lockdown and 3 projects worth Rs 6,578 crore, which have been resolved outside NCLT that is RKM Powergen, Rs 5,207 crore; India Power Haldia, Rs 959 crore; and Essar Transmission, Rs 412 crore. The resolution has been approved by the lenders.

In 3 projects of Rs 2,518 crore, which are being resolved through NCLT, that is in Ind-Barath, Utkal, Rs 1,368 crore; and Jhabua Power, Rs 764 crore; and also Jal Power, Rs 386 crore, successful bidders in NCLT have been identified or are under finalization.

Resolution of these 6 projects is expected to improve the NPA levels going forward.

Moving on to the borrowing portfolio front, in FY21, as of now, as per the approved borrowing program, Rs 90,000 crore of fund mobilization is envisaged from domestic and international markets. So far, PFC has raised close to Rs 29,000 crore from domestic market since April 2020.

The company is actively focusing on increasing funding under 54EC coupon capital bonds, which have a low coupon of 5.75%. In just 3 years, 54EC raising has more than tripled from Rs 292 crore in FY18 to Rs 1134 crore in FY20.

With the focus on balancing assets and liabilities portfolio, the gap between weighted average maturity of assets and liability has reduced significantly from 2.39 years in FY18 to 1.4 years in FY20.

PFC is expecting to maintain its asset -- loan asset growth at similar levels as last year. Accordingly, to sustain its growth level, PFC is expecting to cross last year's disbursement levels during FY2021.

Also, considering that new lending opportunities would be limited in view of the COVID-19 situation, the Rs 90,000 crore discount credit package is a good business opportunity for PFC to maintain its loan asset growth. In addition to this, focus would continue to be on renewable business.

Out of total loan book, around 83% to the government and 17% to the private sector.