Firm's profitability unaffected in lending to states, discoms
As many as 20 states and one union territory have signed an MoU under "UDAY" scheme with the Government and three more are under consideration, but the Rural Electrification Corporation (REC) Limited is not in a 'Debt Trap" and still continues its business of lending to states and power companies, said REC CMD Dr P V Ramesh.
"Our company (REC) has nothing to do with UDAY and it has not affected our profitability," he told media in Mumbai on Tuesday while reiterating that REC is raising capital at lower rates through multiple products and sourcing funds at cheapest possible options and rates.
Noting that these are interesting times for power growth, he said "We are focused on giving competitive rates to those seeking loans which ensuring that power utilities get fair prices."
Replying to questions, he said repayments from UDAY are being invested in new projects. "To let the market be 'stabilized,' we have delayed our borrowings. There were talks that rates were going down and, in the lending rates scenario, we will try to keep margins intact. But we don't intend to reduce our lending rates (3.3% presently)."
Highlighting REC's quarterly and nine-month results, he said PAT (nine months) at December-end 2016 increased by 10% to Rs 4,927 crores, and by 28% at Rs 1,754 crores for Q3FY2016-17, while Total Income increased to Rs 18,117 crores (nine months).
Ujwal DISCOM Assurance Yojana (UDAY) is the financial turnaround and revival package for financial restructuring of debt of power distribution companies for of India (DISCOMs) initiated by the Indian Government.