In a significant development for India’s financial sector, Power Finance Corporation (PFC) is making headlines with a series of announcements and actions that could reshape its financial landscape. The state-owned entity, which plays a crucial role in financing power sector projects, has recently been involved in several high-stakes dealings, including a major project acceptance and a complaint regarding falsified documents from a partner.
On April 22, 2025, PFC confirmed it has lodged a complaint with the Economic Offences Wing (EOW) against Gensol Engineering Ltd. (GEL) for allegedly submitting falsified documents as part of its loan agreement. This action stems from a larger investigation into Gensol’s financial dealings, which have raised red flags for the public sector lender. PFC sanctioned Rs 633 crore to Gensol in January 2023 to facilitate the procurement of 6,000 electric vehicles (EVs) as part of the government's initiative to promote EV adoption through schemes like FAME and PM E-bus Seva.
According to PFC, the irregularities came to light when credit rating agencies CARE and ICRA requested verification of documents from Gensol. Instead of providing the necessary term loan statements, Gensol allegedly submitted “conduct letters” and “no objection certificates,” which are typically required for withdrawing credit ratings. This prompted PFC to take action under its anti-fraud policy, emphasizing its commitment to transparency and accountability in its financial dealings.
In its official statement, PFC noted, "PFC is actively pursuing further actions in the instant case and exploring all possible options." This includes investigating the circumstances surrounding the Rs 307 crore still outstanding from Gensol, which had been servicing its dues regularly until January 31, 2025. However, in the fourth quarter of FY25, PFC had to invoke its Debt Service Reserve Account (DSRA) to cover dues that had accumulated in February and March 2025.
Meanwhile, in an unrelated but equally important development, Ashoka Buildcon has received a letter of acceptance for a new project worth Rs 568.86 crore from Central Railway. This project is expected to bolster Ashoka Buildcon’s portfolio and contribute positively to its financial health.
Additionally, shares of LTIMindtree and Bajaj Housing Finance are under scrutiny as both companies are set to announce their quarterly results on April 23, 2025. Investors are keenly awaiting these outcomes, as they could provide insights into the companies' performances amid a fluctuating economic landscape.
In other financial news, HCL Tech has reported a net profit of Rs 4,307 crore for the fourth quarter, marking an 8% increase from Rs 3,986 crore in the same quarter last year. This growth reflects the company's resilience and adaptability in a competitive market. Similarly, Waaree Energies has seen its fourth-quarter revenue soar to Rs 4,140 crore, a remarkable increase of 37.69%. For the full fiscal year, Waaree Energies reported total revenue of Rs 14,846.06 crore, up 28% year-on-year.
Delta Corp, however, faced a slight downturn, reporting a net profit of Rs 165 crore for the fourth quarter, with revenue dipping by 1% to Rs 183 crore. In contrast, Bharat Forge has received approval from the Competition Commission of India (CCI) for its acquisition of AAM India manufacturing, which could enhance its operational capabilities.
Cyient DLM also reported a positive outcome with a net profit of Rs 31 crore for the fourth quarter, alongside an 18% increase in revenue from operations, totaling Rs 362 crore. Havells India showcased a solid performance with a 16% year-on-year growth in fourth-quarter profit, reaching Rs 518 crore, compared to Rs 446 crore in the previous year.
Amid these developments, PFC is also exploring options to raise substantial funds through the issuance of deep discount bonds. The corporation is in discussions to raise up to Rs 10,000 crore by May 2025, either through zero coupon bonds or coupon-bearing bonds. This move is part of a broader strategy to enhance liquidity and support ongoing projects.
On March 11, 2025, PFC received approval from the Central Board of Direct Taxes to issue a deep discount bond maturing in 10 years, allowing it to raise a maximum of Rs 49,546 crore. This financial maneuver is expected to attract significant interest from investors, particularly given the favorable tax implications associated with long-term capital gains.
In recent months, other public sector companies, including NABARD, SIDBI, IREDA, and IRFC, have sought government approval to issue similar bonds, reflecting a growing trend among public sector entities to tap into the debt market for funding. The rationale behind this strategy is that the income received from these bonds will be treated under long-term capital gains tax, making them more attractive to investors compared to traditional government securities.
As these developments unfold, stakeholders in the financial sector are closely monitoring the situation, particularly the implications of PFC's actions regarding Gensol Engineering and the overall impact on public sector financing. The ongoing scrutiny of financial practices within these organizations highlights the importance of transparency and accountability in maintaining investor confidence and ensuring the integrity of the financial market.
With a complex interplay of financial transactions, regulatory oversight, and strategic planning, PFC's recent activities underscore the dynamic nature of India's financial landscape. As the market reacts to these announcements, the coming weeks will be crucial in determining the trajectory of both PFC and its partners in the evolving economic environment.
