PFC FPO Review

PFC (Power Finance Corporation) FPO Review

Power Finance Corporation is planning its follow-on offer (FPO). PFC is a state run company in which government owns 89.78% stake. It was taken to public in 2007 and at that time the government had divested its 10% stake.

This time, the government is planning to issue 15% fresh equity and 5% divestment of its own stake thus the government is planning to sell 20% of its shares.

Let us discuss the fundamentals of this company.

PFC was set up in July 1986 as a Financial Institution (FI) dedicated to Power Sector financing and committed to the integrated development of the power and associated sectors. The Corporation was notified as a Public Financial Institution in 1990 under Companies Act, 1956. The Corporation was registered as a Non Banking Financial Company by RBI and has been  conferred with the status of  Nav-Ratna PSU  by Govt. of India on 22nd June, 2007.

Well, yes. It is one of the most precious PSU of Government of India.

PFC is providing large range of Financial Products and Services like Project Term Loan, Lease Financing, Direct Discounting of Bills, Short Term Loan, Consultancy Services etc.for various Power projects in Generation, Transmission, Distribution sector as well as for Renovation & Modernization of existing power projects.

Thus, PFC is a fundamentally strong company and I will give this company 4 out of 5 stars. Thus, my recommendation to you is – STRONG BUY.

Buy the shares of this company during FPO. And yes, don’t only buy the shares of this company for the sole purpose of selling it in the short term but stay invested in this strong fundamentally strong company for a long time horizon say more than 5 years and you will definitely make lots of profit.