Power sector lender, Power Finance Corporation (PFC) on Thursday said it is keen to pick up a holding stake in any public sector bank to expand its portfolio and also mark its presence in the banking sector.
While announcing the company’s financial results, PFC chairman and managing director Satnam Singh said, “We are looking to buy a substantial stake in a PSU bank that will allow us to have a representation at the board level.”
Singh said he has written to the ministries of Power and Finance for necessary approvals and is awaiting clearance for their proposed foray. He further said that he had not specified any bank that PFC was keen to buy a stake in the letter.
Singh, however, did not specify which PSU bank PFC was looking to pick up a stake and what would be the company’s investment to buy a stake in the bank.
“We want representation in the board and that entails picking up a substantial stake in the bank.”
Singh also said that PFC has partnered with Tata Capital for a private equity fund for the power sector. To begin with the fund size will $300 million fund and eventually grow to become a $1 billion fund.
Meanwhile, PFC has reported 58 per cent increase in profit after tax (PAT) at Rs 1,294 crore for the quarter ending March 2013 as compared to Rs 818 crore in the year-ago period.
The PAT figure includes provisioning of about Rs 133 crore as required under existing norms for non-banking financial companies. In the latest fourth quarter PFC saw its income rising by 27 per cent to Rs 4,670 crore. The same stood at Rs 3,684 crore in the year-ago period.
“We had higher interest income, lower borrowing costs and increase in spread which resulted in increased profit,” said R Nagarajan, director finance, PFC. For the full year ended March 2013 the company’s PAT climbed 46 per cent to Rs 4,420 crore.