Power Finance Corporation plans Largest ever loan disbursal

Power Finance Corporation declined 0.63% to Rs 118.75 at 12:27 IST on BSE despite reports it is in the process of sanctioning a biggest ever credit-line of Rs 10,000 crore to NTPC for various projects to be completed in the 11th Five Year plan.

The stock hit a high of Rs 121.70 and a low of Rs 116.50 so far during the day. The stock had a 52-week high of Rs 297.40 on 14 November 2007 and a 52-week low of Rs 113.50 on 12 June 2008.

The company has an equity capital of Rs 1,147.77 crore. Face value per share is Rs 10. .

The current price of Rs 118.75 discounts its Q4 March 2008 annualised EPS of Rs 10.29, by a PE multiple of 11.54.

A Memorandum of understanding (MoU) towards the loan is likely to be signed between NTPC and Power Finance Corporation (PFC) in the next one week and the money would be disbursed in installments, reports suggest.

NTPC, which is nearly 30,000 megawatt (MW) company, seeks to generate 50,000 MW by 2012. It has lined up over Rs 13,200 crore capital expenditure in the current financial year and the loans from Power Finance Corporation (PFC) would be partly utilised for the projects being undertaken in 2008-09.

PFC’s net profit declined 19.9% to Rs 295.4 crore on 10.39% increase in net sales to Rs 1366.86 crore in Q4 March 2008 over Q4 March 2007.

The company provides funds based services like term loans, equipment leasing, bill discounting, buyer’s line of credit. It also provides non-funds based services like guarantee services, consultancy services, to the power sector.