S&P removed; Fitch, Moody’s to do PFC rating
However, if the adverse impact of about Rs1130 crore on the re-measurement of deferred tax asset (DTA) due to reduction in corporate tax rate from 35 per cent to 25 per cent is excluded, the profit for the year is comparable to the earlier year, according to a company statement.
Other factors that impacted the profit are sharp rupee depreciation and certain provisioning during the period .Further, for the same reasons the profit dipped during Q4 FY20 also from Rs2118 crore to Rs1435 crore.
PFCs consolidated net profit dipped during FY2019-20 (year on year) from Rs12,640 crore to Rs9777 crore for the same reasons as stated earlier.
However, the decline in consolidated net profit during Q4 FY20 from Rs3391 crore to Rs694 crore appears steeper and pronounced, primarily on account of two factors.
One is due to the treatment given to dividend received from subsidiaries. As per requirement of applicable accounting standards, dividend income of approximately Rs1220 crore received from REC (Rs1143 crore) and other group companies got eliminated from consolidated net profit as part of the consolidation process
Secondly, RECs net profit dipped in Q4 FY20 (year on year) from Rs1256 crore to Rs436 crore due to sharp forex variation, certain provisioning and adverse DTA impact.
The company sanctioned loans valued at more than Rsone lakh crore during the year under review. While the total loan disbursements were to the tune of about Rs68,000 crore, Rs 11,000 crore worth loans were disbursed during the last week of March alone, despite nationwide lockdown. Net NPA of the company reduced from 4.2 per cent to 3.8 per cent during the year.
S&P removed, Fitch and Moody’s to rate PFC
In another development, the Power Finance Corporation (PFC) has stopped using the services of S&P Global Ratings (S&P) effective from June 24, 2020 and accordingly, the company’s rating will now be done by the other two international agencies, Fitch and Moody’s.
Also, PFC has replaced S&P with Moody’s as the rating agency for its $400 million Green Bonds (issued on December 12, 2017 and maturing on December 12, 2027).