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The Power Finance Corporation Ltd. (P. F. C. ), a subsidiary of the Ministry of Power, is an Indian financial institution controlled by the Government of India. It was founded in 1986 and, among other things, serves as the financial backbone of the Indian electrical sector. According to public disclosures, PFC has a net worth of INR 383 billion as of September 30, 2018. ([2] According to the Department of Public Enterprises’ fiscal year 2017–18 survey, PFC is the ninth most profitable central public sector enterprise in the country (CPSE). PFC is India’s largest non-bank financial company (NBFC) and infrastructure finance firm. According to the government, PFC will upgrade its rating from “Navratna” to “Maharatna” on October 12, 2021.
Structure of the Organization
The corporation is headed by Ravinder Singh Dhillon, who serves as chairman and managing director at the moment.
The company is divided into three divisions, each headed by a functional director: Commercial, Projects, and Finance & Financial Operations. The Commercial Division is responsible for credit appraisal and categorization of borrower entities, as well as for the review and analysis of power sector changes. The Projects Division is responsible for overseeing operations in various states as well as project appraisal. The Finance Division is responsible for the collection and disbursement of funds. PFC operates on a lean basis. As of March 31 2019, the company employed approximately 500 people.
Maharatna Awarded
The government-controlled Power Finance Corporation was recently accorded the label “Maharatna” by the government (PFC).
The Public Enterprises Department, which reports to the Finance Ministry, has issued an order in this respect.
Power Finance Corporation is the country’s 11th public sector organization to receive the prestigious ‘Maharatna’ classification, joining the ranks of such organizations like ONGC, IOC, SAIL, and Bharat Heavy Electricals Limited (BHEL).
The Most Critical Points
The present status is “Mahararatna.”
Large Central Public Sector Enterprises were encouraged to become global behemoths as part of the Maharatna dispensation, which was initiated by the Union government.
CPSEs are enterprises in which the central government owns at least 51% of the voting capital.
A corporation is designated as “Maharatna” if it has earned net profits that exceed Rs. 5,000 crore for three straight years, average annual revenue of more than Rs. 25,000 crore for 3 years, or an average yearly net value of more than Rs. 15,000. It must also have a global presence or activity.
Additionally, the company must earn the Navratna title and be listed on the Indian stock market
The government has created a set of criteria for awarding Maharatna value to CPSEs.
PFC, established in 1986 and administered by the Ministry of Power, is the world’s biggest infrastructure finance corporation focused only on the electrical sector.
Increased Operational and Financial Efficiency: In addition to receiving broader government authority to engage in mergers and acquisitions, PFC has increased its financial and operational efficiency since 2008.
Up to Rs. 5,000 crore (or 15% of the company’s net value) may be invested in a single project.
Miniratna CPSEs and Navratna will be able to invest up to Rs. 500 crore or even Rs. 1000 crore in a single transaction, respectively.
The Board of PFC can establish and implement programmes in the areas of personnel and human resource management, as well as training.
To ensure affordable and reliable “Power For All 24×7,” the Power Finance Corporation (PFC) will offer competitive power sector financing.
Additionally, the increased authority conferred by the Maharatna designation will assist PFC in advancing the government’s motive, which includes funding under the NIP, a national commitment to use 40% more renewable energy by 2030, and efficient monitoring and implementation.
What Role Does PFC Play Specifically in the Maharatna Initiative?
If Power Finance Corporation is given Maharatna status, the board of directors will have increased financial discretion.
As a result of its new recognition, Power Finance Corporation will be able to offer more competitive finance to the power sector. In the long run, it will contribute to the continued availability of affordable and dependable “Power for All” 24 hours a day, seven days a week.
With Maharatna’s expanded power, there will be diversity in PFC’s operations and expedite future commercial growth, as well as leverage its position to help the government achieve its objectives for the holistic development of the power industry.
Conclusion
The Maharatna Central Public Sector Enterprises or CPSE Board of Directors has the authority to make equity investments in order to establish joint financial ventures and owned subsidiaries.
A CPSE may be merged or acquired in India or in foreign, which could be a ceiling of 15% of CPSE’s net worth and a maximum transaction value of Rs five thousand crores in a single project.
The board governors are also capable of creating and implementing programmes related to human resource management and personnel management, as well as training. Apart from that, they can develop strategic alliances and other technology ventures.
