INDEX

Sr. NO. Contents Page NO.

1. Introduction

2. Objectives of the Study

3. Research Methodology

4. Analysis of Financial System

5. Company Profile of PFC

6. Functional Analysis of PFC

7. Findings & Suggestions

8. Conclusion

9. Bibliography
 Chapter 1:
INTRODUCTION

1|Page
 Power Finance Corporation Ltd is an Indian financial institution. Established in 1986,
it is the financial back bone of Indian Power Sector. PFC's Net worth as on 30 September 2018
is INR 383billion. PFC is the 8th highest profit making CPSE as per the Department of Public
Enterprises Survey for FY 2017-18. PFC is India's largest NBFC and also India's largest
Infrastructure Finance Company.
Initially wholly owned by the Government of India, the company issued an Initial
Public Offering in January, 2007. The issue was oversubscribed by over 76 times, which is one
of the largest for an IPO of any Indian Company. PFC is listed on the Bombay Stock Exchange
(BSE) and the National Stock Exchange (NSE). It is also an ISO 9001:2000 certified company
and enjoys the status of Navratna Company in India. On 6 December 2018, the Government of
India approved PFC's takeover of REC. The acquisition transaction was completed on 28
March 2019 with PFC paying almost Rs. 14,500 Cr to the Govt. of India for the 52.63% stake.
Power Finance Corporation was dedicated to power sector financing and committed
to the integrated development of the power and associated sectors. The corporation was notified
as a public financial institution in 1990 under the Companies Act, 1956.
The company was conferred with the status of Navratna PSU by Government of India
on 22nd June, 2007. Under the Navratna status, the government has delegated enhanced powers
to CPSEs having comparative advantage and the potential to become global players. The
corporation is registered as a Non-Banking Financial Company with the RBI.
PFC is providing large range of financial products and services like project term loan,
lease financing, direct discounting of bills, short term loan, consultancy services etc for various
power projects in generation, transmission, distribution sector as well as for renovation &
modernisation of existing power projects.

2|Page
 The Ministry of Power, Central Electricity Authority and PFC are working together to
facilitate development of Ultra Mega Power Projects with the capacity of about 4000 MW each
under Tariff based competitive bidding route. Being large in size, these projects will meet the
power needs of number of states through transmission of power on regional and national grids.

The company clients are State Electricity Boards, State Power Utilities, State
Electricity/Power Departments, Other State Departments (like Irrigation Department) engaged
in the development of power projects, Central Power Utilities, Joint Sector Power Utilities,
Equipment Manufacturers and Private Sector Power Utilities.

The registered office of the company is located in New Delhi, whereas regional offices
are in Mumbai and Chennai.

3|Page
 Chapter 2:
OBJECTIVES OF
THE STUDY

4|Page
OBJECTIVES OF STUDY

o “To analyse the Financial sector in terms of Business, key players and markets.”

o “To analyse the Power finance Corporation Limited company in terms of present

business, competition position and future growth.”

o “To find out job opportunities available within the company and do their analysis.”

o “To do in depth analysis of two sectors financial and marketing of the company.”

5|Page
 Chapter 3:
RESEARCH
METHODOLOGY

6|Page
 “A careful investigation enquiry especially through search for new facts in any
branch of knowledge.” Research methodology is a way to systematically solve the research
problem. It may be understood as a science of study how research is done scientifically.
The various steps that are generally adopted by researcher in study his research problem
along with the logic behind them. It is necessary for the researcher to know not only the
research method or techniques but also the methodology. Thus, when we talk of research
methodology, we not only talk of the research methods but also consider the logic behind
the methods we use in the contest of our research and explain why we are using a particular
method or technique and why we are not using others so that research is capable of being
evaluated either by research himself or by others. There is different source of collection
data. This is the first stage in statistics. Before deciding the source to collect the data one
has to make a proper planning of investigation and the purpose of inquiry.
Most of the data collected for this project is Secondary Data. Secondary data is
the data that is collected from the primary sources which can be used in the current research
study. Collecting secondary data often takes considerably less time than collecting primary
data where you would have to gather every information from scratch. It is thus possible to
gather more data this way. Secondary data can be obtained from two different research
stands,

1. Secondary research: Secondary research will involve reviewing existing literature,

including academic papers, case studies, whitepapers, and industry reports, to gain a
broader understanding of the Infosys Finacle software and its impact on the banking
industry. The secondary research will cover aspects such as the software's features,
functionalities, architecture, and user interface, as well as its advantages, limitations,
and competitive landscape.

2. Data analysis: The data collected through primary and secondary research will be
analysed to identify patterns, trends, and key insights. This analysis will help in
understanding the actual working of FMC.

3. Company Profile: This Project will also Include a detail analysis of a Power Finance
Corporation Ltd. In this project companies’ financial status, its market value and its
basic information will be analysed

4. Conclusion and recommendations: Based on the research findings, the project report
will provide a conclusion on the Actual working of power finance corporation in
meeting the evolving needs of the power finance sector. Additionally, This project will
also include various articles from newspapers, magazines and websites.

7|Page
 Chapter 4:
ANALYSIS OF
FINANCIAL
SYSTEM

8|Page
FINANCIAL SERVICES SECTOR
The financial sector is a section of the economy made up of firms and institutions
that provide financial services to commercial and retail customers. This sector comprises a
broad range of industries including banks, investment companies, insurance companies, and
real estate firms. A large portion of this sector generates revenue from mortgages and loans,
which gain value as interest rates drop. The health of the economy depends, in large part, to the
strength of its financial sector. The stronger it is, the healthier the economy. A weak financial
sector typically means the economy is weakening.
Understanding the Financial Sector Many people equate the financial sector with
Wall Street and the exchanges that operate on it. But there's much more to it than that. The
financial sector is one of the most important parts of many developed economies. It is made up
of brokers, financial institutions, and money markets all of which provide the services needed
to help keep Main Street functioning every day. In order for an economy to remain stable, it
needs to have a healthy financial sector. This sector advances loans for businesses so they can
expand, grants mortgages to homeowners, and issues insurance policies to protect people,
companies, and their assets. It also helps build up savings for retirement and employs millions
of people. The financial sector generates a good portion of its revenue from loans and
mortgages. These gain value in an environment where interest rates drop. When rates are low,
the economic conditions open up the doors for more capital projects and investment. When this
happens, the financial sector benefits, meaning more economic growth.
India has a diversified financial sector undergoing rapid expansion, both in terms
of strong growth of existing financial services firms and new entities entering the market. The
sector comprises commercial banks, insurance companies, non-banking financial companies,
co-operatives, pension funds, mutual funds and other smaller financial entities. The banking
regulator has allowed new entities such as payments banks to be created recently thereby
adding to the types of entities operating in the sector. However, the financial sector in India is
predominantly a banking sector with commercial banks accounting for more than 64 per cent
of the total assets held by the financial system.
The Government of India has introduced several reforms to liberalise, regulate and
enhance this industry. The Government and Reserve Bank of India (RBI) have taken various
measures to facilitate easy access to finance for Micro, Small and Medium Enterprises
(MSMEs). These measures include launching Credit Guarantee Fund Scheme for Micro and
Small Enterprises, issuing guideline to banks regarding collateral requirements and setting up
a Micro Units Development and Refinance Agency (MUDRA). With a combined push by both
government and private sector, India is undoubtedly one of the world's most vibrant capital
markets. In 2017, a new portal named 'Udyami Mitra' has been launched by the Small Industries
Development Bank of India (SIDBI) with the aim of improving credit availability to Micro,
Small and Medium Enterprises' (MSMEs) in the country. India has scored a perfect 10 in
protecting shareholders' rights on the back of reforms implemented by Securities and Exchange
Board of India (SEBI). The country’s financial services sector consists of the capital markets,
insurance sector and non-banking financial companies (NBFCs). India’s gross national savings
(GDS) as a percentage of Gross Domestic Product (GDP) stood at 30.50 per cent in 2019. The
total amount of Initial Public Offerings increased to Rs 84,357 crore (US$ 13,089 million) by
the end of FY18. In financial year 2019, total funds raised stood at Rs 19,900 crore (US$ 2.85
billion). The number of Ultra High Net Worth Individual (UHNWI) is estimated to increase to
10,354 in 2024 from 5,986 in 2019.

9|Page
 India has scored a perfect 10 in protecting shareholders' rights on the back of
reforms implemented by Securities and Exchange Board of India (SEBI) in World Bank's Ease
of Doing Business 2020 report. The asset management industry in India is among the fastest
growing in the world.
In March 2019, corporate investors Assets Under Management AUM stood at Rs
9,54,627.51 crore (US$ 136.59 billion), while HNWIs and retail investors reached Rs
7,51,666.95 crore (US$ 107.55 billion) and Rs 6,29,848.68 crore (US$ 90.12 billion),
respectively. In the Asia-Pacific, India is among the top five countries in terms of HNWIs. The
value of alternative investment funds rose from Rs 13,776 crore in June 2016 to Rs 74,817
crore (US$ 10.70 billion) in June 2019.The MF industry’s Assets Under Management (AUM)
has grown from Rs 10.96 trillion (US$ 156.82 billion) in October 2014 to Rs 28.18 trillion
(US$ 403.32 billion) in January 2020. In FY19, equity mutual funds have registered a record
net inflow of Rs 990.87 billion (US$ 14.18billion). The equity mutual funds registered a net
inflow of Rs 4,499 crore (US$ 643.73 billion) in December 2019.
Total equity funding's of microfinance sector grew at the rate of 39.88 to Rs 9,631
crore (Rs 4.49 billion) in 2017-18 from Rs 6,885 crore (US$ 1.03 billion) in 2016-17. The
public deposit of NBFCs increased from Rs 40,955.54 crore (US$ 5.86 billion) in FY09 to Rs
31,905 crore (US$ 4.95 billion) in FY18, registering a compound annual growth rate (CAGR)
of 36.86 percent. The equity mutual funds registered a net inflow of Rs 6,489 crore in
September 2019.
In November 2018, Bombay Stock Exchange (BSE) has enabled offering live
status of applications filed by listed companies on its online portal and introduced weekly
futures and options contracts on Sensex 50 index from October 26, 2018. The Government of
India is planning to launch a global exchange traded fund (ETF) in FY20 to raise long term
investments from overseas pension funds.
The Government of India has taken various steps to deepen the reforms in the
capital markets, including simplification of the Initial Public Offer (IPO) process which allows
qualified foreign investors (QFIs) to access the Indian bond markets. In 2018, Rs 30,959
crore(US$ 4.43 billion) were raised from initial public offerings (IPOs) whereas Rs 10,300
crore (US$ 1.47 billion) have been raised in H1 2019. As per Union Budget 2019-20, 100 per
cent foreign direct investment (FDI) will be permitted for insurance intermediaries. The
insurance sector could be opened to 74 per cent FDI from 49 per cent. Government has
approved 100 per cent FDI for insurance intermediaries.

10 | P a g e
EVOLUTION OF INDIAN FINANCIAL SYSTEM

Economic development of the nation is completely depending on its financial

structure. Both in long run and short run, the financial system and its efficiency dictates the
success of the nation in terms of economic growth. The larger, the proportion of financial assets
to real assets, the greater the scope of economic growth1. Investments which are considered as
the core of financial structure is a pre-condition of economic growth. This apart, to sustain
growth, continued investment in the growth process is essential. As finance is an important
input in the growth process, it has a crucial role to play in the development off economy. The
increasing rate of saving is correlated with the increase in the proportion of savings held in the
form of financial assets relative to tangible assets. The word "system", in the term "financial
system”, implies a set of complex and closely connected or interlined institutions, agents,
practices, markets, transactions, claims, and liabilities in the economy2. The financial system
is concerned about money, credit and finance-the three terms are intimately related yet are
somewhat different from each other. Indian financial system consists of financial market,
financial instruments and financial intermediation. In simple terms, financial system is the set
of inter-related activities/services working together to achieve some predetermined purpose or
goal3. It includes different markets, the institutions, instruments, services and allocate savings
efficiently in an economy to ultimate users either for investment in real “Supply funds to
various sectors to activities of the economy in ways that promote the fullest possible utilization
of resources without the destabilizing consequence of price level changes or unnecessary
interference with individual desires. According to Robinson, the primary function of the system
is “to provide a link between savings and investment for the creation of new wealth and to
permit portfolio adjustment in the composition of the existing wealth.

11 | P a g e
FUTURE GOALS OF FINANCIAL SERVICES SECTOR

➢ India is expected to be fourth largest private wealth market globally by

2028.
➢ India is today one of the most vibrant global economies, on the back of
robust banking and insurance sectors. The relaxation of foreign investment
rules has received a positive response from the insurance sector, with many
companies announcing plans to increase their stakes in joint ventures with
Indian companies. Over the coming quarters there could be a series of joint
venture deals between global insurance giants and local players.
➢ The Association of Mutual Funds in India (AMFI) is targeting nearly five-
fold growth in assets under management (AUM) to Rs 95 lakh crore (US$
1.47 trillion) and a more than three times growth in investor accounts to
130 million by 2025.
➢ India's mobile wallet industry is estimated to grow at a Compound Annual
Growth Rate (CAGR) of 150 per cent to reach US$ 4.4 billion by 2022
while mobile wallet transactions to touch Rs 32 trillion (USD $ 492.6
billion) by 2022.
SWOT ANALYSIS:

Chapter 5:
ANALYSIS OF COMPANY

12 | P a g e
 Chapter 5:
COMPANY
PROFILE OF PFC

13 | P a g e
ORGANIZATION’S STRUCTURE
The Corporation is headed by the Chairman and Managing Director; who at present
is Shri Ravinder Singh Dhillon. The company has three wings, each headed by a Functional
Director namely, Commercial Division, Projects Division and Finance & Financial Operations
division. The Commercial Division looks after the credit appraisal and categorization of
borrower entities power sector reforms, review & analysis. The Projects Division controls the
operation in various states and project appraisal. Finance s Division looks after the Fund
Mobilization and Disbursement. PFC is a lean organization. The number of employees as on
31 March 2019 were around 500. Since its inception, PFC has been providing financial
assistance to power projects across India including generation, transmission, distribution and
RM&U projects. Recently, it has forayed into financing of other infrastructure projects which
have backward linkages to the power sector like coal mine development, fuel transportation,
oil & gas pipelines etc. The borrower profile includes State Electricity Boards, State sector
power utilities, Central sector power utilities and Private sector companies. PFC is also the
nodal agency for the implementation of the ambitious Ultra Mega Power Plants (UMPPs) and
the R-APDRP programme of Govt. of India. The company also has the mechanism of rating
different state Power Utilities on its performance.

VISION AND MISSION

"To be the leading institutional partner for the power and allied infrastructure
sectors in India and overseas across the value chain "PFC would be the most preferred Financial
Institution; providing affordable and competitive products and services with efficient and
internationally integrated sourcing and servicing, partnering the reforms in the Indian Power
Sector and enhancing value to its stake holders; by promoting efficient investments in the
power and allied sectors in India and abroad. Company will achieve this being a dynamic,
flexible, forward looking, trustworthy, socially responsible organization, sensitive to our
stakeholders' interests, profitable and sustainable at all times, with transparency and integrity
in operations."

OPERATIONS
Since its inception, PFC has been providing financial assistance to power projects
across India including generation, transmission, distribution and RM&U projects. Recently, it
has forayed into financing of other infrastructure projects which have backward linkages to the
power sector like coal mine development, fuel transportation, oil & gas pipelines etc. The
borrower profile includes State Electricity Boards, State sector power utilities, Central sector
power utilities and Private sector companies. PFC is also the nodal agency for the
implementation of the ambitious Ultra Mega Power Plants (UMPPs) and the RAPDRP
programme [6][7] of Govt. of India. The company also has the mechanism of rating different
state Power Utilities on its performance.

14 | P a g e
SUBSIDIARY AND ASSOCIATE COMPANIES

PFC presently has ten subsidiary companies. PFC Consulting Ltd. (PFCCL) is a
wholly owned subsidiary handling fee-based service. The six other companies namely Orissa
Integrated Power Limited, Coastal Karnataka Power Limited, Coastal Tamil Nadu Power
Limited, Coastal Maharashtra Power Limited, Jharkhand Integrated Power Limited and
Akaltara Power Limited, are SPVs (Shell Companies) created for implementing the flagship
Ultra Mega Power Projects. After purchase of the entire holding of Govt of India in Rural
Electrification Corporation Limited (REC) in FY 2018-19, REC has now become a subsidiary
of PFC.PFC is also one of the promoters in Energy Efficiency Services Limited (EESL), with
NTPC, PowerGrid and REC being the other promoters. EESL is currently implementing of
world's largest energy efficiency portfolio and has been instrumental in energy savings of more
than 50 billion kWh/year and estimated GHG reduction of more than 40 million tonne CO2 per
year.

AWARDS & RECOGNITIONS

1 MOU Excellence Award 2009-10 January 2012

2 KPMG-Infrastructure Today Award 2011 December 2011

3 Dainik Bhasker India Pride PSU Award 2011 October 2011

4 SCOPE Commendation Certificate 2009-10 April 2011

5 Global HR Excellence Awards 2011 February 2011

6 KPMG-Infrastructure Today Award 2008 December 2008

7 India Power Award 2008 November 2008

8 Golden Peacock Award 2007 September 2007

15 | P a g e
OTHER INFORMATION

Headquarters New Delhi

Owner
Ministry of Power, Government of India
Founded July 1986

Subsidiaries REC, PFC Consulting Limited

Products Rupee Term Loan, Foreign Currency Loan, Short
Term Loan
Services Financial Consulting, Financial Products,
Investment Banking, Loan Management, Linkage
Management
Traded as NSE: PFC
BSE: 532810
Website pfcindia.com
Revenue ₹77,625 crore (US$9.7 billion) (2023)
Net income ₹21,179 crore (US$2.7 billion) (2023)
Total assets ₹896,112 crore (US$110 billion) (2023)
Total equity ₹111,981 crore (US$14 billion) (2023)

16 | P a g e
17 | P a g e
 Chapter 6:
FUNCTIONAL
ANALYSIS OF PFC

18 | P a g e
19 | P a g e
 Chapter 7:
FINDINGS &
SUGGESTIONS

20 | P a g e
FINDINGS:

The Power Finance Corporation (PFC) plays a crucial role in the development and
financing of the power sector in India. This project report aims to provide insights into the
actual working of the Power Finance Corporation based on an in-depth analysis of its
operations, financial performance, and impact on the power sector.
1. Financial Performance:
• Robust Financial Growth: PFC has demonstrated consistent and robust financial
growth over the years. Its revenue has steadily increased, primarily driven by lending
to various power projects and utilities.
• Profitability: PFC has maintained healthy profitability, with a strong focus on
managing its cost of funds and maintaining a stable net interest margin. This has
enabled the corporation to generate substantial profits.
• Asset Quality: PFC has managed its asset quality effectively, with a low level of non-
performing assets (NPAs). Its prudent risk management practices have contributed to
this positive outcome.
2. Role in Power Sector Development:
• Infrastructure Financing: PFC has been a key player in financing power infrastructure
projects, including thermal, hydro, renewable, and transmission projects. This has
facilitated the expansion of power generation and distribution capacity in India.
• Promotion of Renewable Energy: PFC has actively supported renewable energy
projects by providing financial assistance and promoting green energy initiatives. This
has contributed to the country's efforts to reduce its carbon footprint.
• Rural Electrification: The corporation has played a significant role in rural
electrification by financing projects aimed at extending electricity access to remote and
underserved areas.
3. Government Initiatives and Policy Support:
• Government Ownership: As a government-owned financial institution, PFC enjoys
strong policy support, which enhances its credibility and ability to mobilize funds for
the power sector.
• Implementation of UDAY Scheme: PFC actively participated in the Ujwal Discom
Assurance Yojana (UDAY) scheme, which aimed to improve the financial health of
power distribution companies. This demonstrates PFC's commitment to addressing
sector-wide challenges.

21 | P a g e
4. Challenges and Future Outlook:
• NPA Risks: While PFC has managed its NPAs effectively so far, it faces potential
challenges in the future due to the economic uncertainties and project-specific risks
associated with the power sector.
• Need for Diversification: To ensure long-term sustainability, PFC may need to
diversify its portfolio beyond conventional power generation projects and invest more
in emerging areas like energy storage and smart grid technologies.
• Global Expansion: Exploring opportunities for international expansion could be a
strategy for PFC to leverage its expertise and contribute to global energy development.
5. Social Impact:
• Job Creation: PFC's financing of power projects has not only facilitated energy access
but also created job opportunities, contributing to economic development.
• Improved Quality of Life: Reliable and accessible electricity has enhanced the quality
of life for millions of people, especially in rural areas, leading to improved healthcare,
education, and overall well-being.
The Power Finance Corporation has been instrumental in the growth and
development of the Indian power sector. Its prudent financial management, policy support, and
commitment to renewable energy have positioned it as a key player in India's energy transition.
However, it must adapt to changing industry dynamics and emerging challenges to continue
playing a pivotal role in the country's power sector development.

22 | P a g e
SUGGESTIONS:

1. Risk Management:

Strengthen risk management practices to assess and mitigate credit and operational risks
effectively. Regularly review and update risk policies and procedures.

2. Sustainable Financing:

Promote sustainable financing by offering favourable terms for green and renewable energy
projects. Encourage investments in clean energy to align with global sustainability goals.

3. Digital Transformation:

Invest in digital technologies and data analytics to streamline processes, improve efficiency,
and enhance customer experience. This includes digital loan application and approval
processes.

4. Financial Inclusion:

Develop financial products and services tailored for small-scale and rural power projects to
promote financial inclusion and support broader economic development.

23 | P a g e
 Chapter 8:
CONCLUSION

24 | P a g e
 In conclusion, this project report has provided a comprehensive overview of the
actual working of the Power Finance Corporation (PFC), shedding light on its pivotal role in
the energy sector and its impact on the socio-economic development of our nation. Through an
in-depth analysis of PFC's functions, financial mechanisms, and key initiatives, we have gained
valuable insights into how this financial institution operates and contributes to the growth of
the power sector.

Throughout the report, we have highlighted PFC's commitment to promoting

sustainable and inclusive development by financing power projects across various sectors, from
renewable energy to transmission and distribution. We have also discussed its strategic
partnerships, innovative financing models, and the impact of its initiatives on electrification,
job creation, and environmental sustainability. It is evident from our research that PFC's efforts
have played a pivotal role in ensuring a reliable and accessible power supply for millions of
Indians, thereby supporting the country's economic growth and social progress. The
corporation's dedication to maintaining financial prudence and transparency in its operations
has not only earned it the trust of investors but has also strengthened the power sector's
resilience.

As we conclude this project, it is essential to acknowledge the ever-evolving nature

of the energy landscape and the challenges that lie ahead. PFC's adaptability and forward-
looking approach will continue to be crucial in addressing emerging issues such as climate
change, energy efficiency, and the integration of renewable energy sources.

In summary, the Power Finance Corporation stands as a testament to the

significance of financial institutions in the development of critical infrastructure like the power
sector. Its operational efficiency, commitment to sustainability, and contributions to India's
energy security make it a cornerstone of the nation's progress. As we move forward, a deeper
understanding of PFC's workings will undoubtedly be valuable in shaping the future of India's
power sector and achieving a brighter, more sustainable energy future for all.

25 | P a g e
 Chapter 9:
BIBLIOGRAPHY
WEBSITES

1. https://en.wikipedia.org/wiki/Power_Finance_Corporation
2. http://www.pfcindia.com/Home
3. https://www.owler.com/company/pfcindia
4. https://www.nseindia.com/get-quotes/equity?symbol=PFC

BOOKS

1. “Banking Law & Practice in India” by M L Tannan, Vinod Kothari

NEWSPAPERS

1. The Economic Times

2. The Financial Express
3. Financial Times
4. Business Standard

26 | P a g e