Power Finance Corporation Ltd. (PFC) is an Indian public sector company engaged in infrastructure finance activities. Established in 1986, it provides financing for the Indian power sector and operates under the administrative control of the Ministry of Power, Government of India. PFC was classified as a 'Maharatna' enterprise on October 12, 2021. The company operates as one of India's premier infrastructure finance companies, exclusively focused on the power sector's development and financing needs.
Initially wholly owned by the Government of India, the company issued an IPO in January 2007. The issue was oversubscribed by over 76 times, one of the largest for an IPO of any Indian CPSU. PFC is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The company has achieved significant recognition and is also an ISO 9001:2000 certified company and enjoys the status of Maharatna PSU in India.
Power Finance Corporation has demonstrated robust financial performance in recent years. The market capitalization of Power Finance Corporation Ltd (PFC) is ₹1,36,376.71 Crore as of July 4, 2025. The company's financial strength is evident from its strong operational metrics and consistent profitability.
For the full financial year 2025:
* Net profit rose 16.34% to ₹22,990.81 Crore, as against ₹19,761.16 Crore during the previous year ended March 2024.
* Sales rose 16.82% to ₹1,05,717.48 Crore, as against ₹90,495.28 Crore during the previous year ended March 2024.
The company's quarterly performance has been particularly strong:
* Net profit of Power Finance Corporation rose 12.31% to ₹6,316.45 Crore in the quarter ended March 2025, as against ₹5,624.36 Crore during the previous quarter ended March 2024.
* Sales rose 20.46% to ₹28,988.16 Crore in the quarter ended March 2025, as against ₹24,064.14 Crore during the previous quarter ended March 2024.
* Market Capitalization: ₹1,36,377 Crore (as of July 2025)
* Annual Revenue (FY25): ₹1,05,717 Crore
* Net Profit (FY25): ₹22,991 Crore
* P/E Ratio: 5.93
* P/B Ratio: 1.02
* Dividend Yield: 3.89%
* 52-week High: ₹580
* 52-week Low: ₹357.25
Power Finance Corporation (PFC) has demonstrated robust financial growth, reporting a consolidated profit after tax of ₹30,514 Crore for FY25, alongside a significant improvement in asset quality, evidenced by a net NPA ratio of just 0.39%. The company has also maintained a strong dividend policy, with Power Finance Corporation Ltd declaring a dividend of ₹2.05 (translating to a dividend yield of 3.76%) in the quarter ending March 2025.
Power Finance Corporation operates through multiple divisions, each serving specific functions in the power sector ecosystem. The company has three wings, each headed by a Functional Director: the Commercial Division, Projects Division, and Finance Division.
* The Commercial Division is responsible for credit appraisal, categorization of borrower entities, power sector reforms, review, and analysis.
* The Projects Division oversees operations in various states and project appraisal.
The Company is primarily engaged in providing financial assistance to the power sector. The Company's fund-based products include project term loans, lease financing for the purchase of equipment, short/medium-term loans to equipment manufacturers, grants/interest-free loans for studies/consultancies, corporate loan, line of credit for import of coal, buyer's line of credit, lease financing for wind power projects, debt refinancing, and credit facility for the purchase of power through power exchange.
Its non-fund-based products include deferred payment guarantee, letter of comfort (LoC), guarantee for the performance of contract/obligations with regards to fuel supply agreement (FSA), and policy for a guarantee of credit enhancement. The Company offers consultancy and advisory services in financial, regulatory, and capacity building.
Since its inception, PFC has been providing financial assistance to power projects across India, including generation, transmission, distribution, and RM&U projects. Recently, it began financing other infrastructure projects which have backward linkages to the power sector, such as 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. The company has also expanded its role in policy implementation, as PFC is also the nodal agency for the implementation of the ambitious Ultra Mega Power Plants (UMPPs) and the R-APDRP program of Govt. of India.
Power Finance Corporation has strategically expanded through acquisitions and subsidiary formations. After the purchase of the entire holding of the Govt. of India in Rural Electrification Corporation Limited, it became a subsidiary of PFC in the fiscal year 2018–2019. On December 6, 2018, the Government of India approved PFC's takeover of REC. The acquisition transaction was completed on March 28, 2019, with PFC paying almost ₹145 million to the government of India for the 52.63% stake.
The Company's subsidiaries include REC Limited and PFC Consulting Ltd. PFC Consulting Limited (PFCCL) was incorporated in the form of a wholly-owned subsidiary on March 25, 2008, in order to give it requisite autonomy in functions and flexibility in operations. PFCCL is mandated to promote, organize, and carry on consultancy services to the Power Sector and is also undertaking the work related to the development of UMPPs.
The company has positioned itself strategically in the renewable energy sector. However, the company has adopted a cautious approach, moderating its loan growth expectations to 10-11% due to sectoral challenges, including land acquisition issues and delays in Power Purchase Agreements. The strategic focus on renewable energy financing aligns with national goals, presenting new opportunities despite the competitive landscape and potential margin pressures from repo rate cuts.
The final RBI guidelines favorably impact project finance, with lower provisioning norms. PFC is well-positioned for future growth, estimating an FY25–27 PAT CAGR of 8% and a dividend yield of ~5% in FY27E.
Over the last two-three years, PFC has focused on diversifying its borrowing portfolio by raising funds from international markets. In November 2017, PFC launched its main Green Bond issue for US$400 million, which witnessed the tightest ever spread for any Indian Issuer for its maiden 10-year issue.
In the first quarter of the Financial year 2020, PFC has raised about US$1.3 billion from the international markets. Out of this, US$1 billion was raised in June 2019, which was the first dual and largest USD bonds transaction for a Govt-owned Indian NBFC.
Power Finance Corporation continues to play a pivotal role in India's power sector development, combining traditional financing with innovative approaches to meet the country's growing energy needs. The company's strong financial performance, strategic positioning in renewable energy, and robust subsidiary network position it well for continued growth in India's evolving power sector landscape.
