- Date : 24/07/2023
- Read: 4 mins
Know more about the Power Finance Corporation share that has surged to a 52-week high, powered by its recent funding decisions.
Power Finance Corporation (PFC) is a public sector undertaking owned by the Ministry of Finance, the Government of India. The stock price of this listed company has skyrocketed in the last few days. If you look at a broader time frame, the stock has been on the ascendency for the last 9-10 months.
- This coincides with the company signing 19 green energy contracts of Rs 2.37 lakh crores.
- Power Finance Corporation is a Maharatna company engaged in power company financing
- Its stock has seen a rally in recent days and months
- The finance company is expanding its loan book into the clean energy sector
- The company has displayed strong revenue and income results in FY23
Also Read: Investors Flock To India’s Green Energy Stocks – Here’s Why You Should Too
PFC’s Stock Powerplay
PFC’s share price was circling in the vicinity of Rs 100 during mid-October 2022. It moved around the Rs 150 mark during the January-March 2023 period. Between April and June, the share travelled further north to touch Rs 200. In the last month, PFC share price has increased by more than 20% to touch a 52-week high of Rs 241, and counting.
Thus, the stock is poised to increase 2.5 times in a matter of nine months!
Going Green
PFC has recently signed MOUs with several clean energy sector companies. With this, the company has reiterated its commitment to broaden its energy transition portfolio and become the go-to financer for clean energy enterprises.
PFC has so far agreed to finance 20 companies that are directly engaged in the clean energy sector. This includes solar power, wind energy, green hydrogen, electric vehicle, battery storage, manufacturing of green energy equipment, etc. Among the companies with whom PFC has signed MOU are Greenco, Adani Group, ReNew Power, Continuum, JBM Auto, and Megha Engineering & Infrastructure. Besides, the company has also expanded its loan portfolio into infrastructure projects like refineries, ports, roadways, metro networks, biofuel, waste-to-energy projects, etc.
The company also plans to launch a subsidiary in the International Financial Services Centre, Gandhinagar, which is awaiting RBI approval.
Also Read: What Are Green Energy Mutual Funds? Here Are The Best Ones To Choose
Finances of the Financer
PFC’s loan book stood at Rs 4.32 lakh crore in March 2023, out of which 73,000 crore is lent to private power companies, and Rs 3.2 lakh crore to state power companies. The outstanding period as of the same date was Rs 3.63 lakh crore. Out of its total disbursals, 78% are in the conventional sector and 10% in renewables. In terms of volume, PFC is the largest lender in both segments.
For FY23, PFC generated a consolidated revenue of Rs 77,568 crore and a net income of Rs 21,178 crore. This marks an improvement of Rs 1,300 crore in revenue, and Rs 2,400 crore in net income over the previous year.
Conclusion
PFC’s expansion towards the financing of clean energy has raised the expectations of investors. Investors should keep the stock on their watchlist and monitor if it is heading towards a correction after the recent surge. At a macro level and for the long term, you should also track how the clean energy sector develops in the days ahead.
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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
