Power Finance Corporation (PFC), a state-owned power sector financing company, plans to raise up to Rs 4,000 crore in capital through tier-II bonds to strengthen its capital adequacy.
The company’s capital adequacy ratio (CAR), which stood at 17.71 per cent in early part of the current financial year, improved to 17.91 per cent at the end of September 2018. It now stands at 19 per cent.
The lender can raise tier-II capital up to 50 per cent of tier I capital base. At present, tier II is 3 per cent, which PFC will hike to 5 per cent. In absolute terms, the company will look at raising up to Rs 4,000 crore through tier II bonds, said PFC Director (finance) N B Gupta. He, however, did not reveal timing and terms of the capital raising.
