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ONLINE SUMMER PROJECT REPORTCOMPANY ANALYSIS OF Power Finance Corporation LtdSUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIRMENTS FOR THE MASTER OF BUSINESS ADMINISTRATION (MBA) OF CHANDIGARH UNIVERSITY, GHARUAN, MOHALISUBMITTED TO: SUBMITTED BY:Name: Dr Aggarwal STUDENT NAME: Rohit GargDesignation: ...

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ONLINE SUMMER PROJECT REPORT COMPANY ANALYSIS OF Power Finance Corporation Ltd SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIRMENTS FOR THE MASTER OF BUSINESS ADMINISTRATION (MBA) OF CHANDIGARH UNIVERSITY, GHARUAN, MOHALI

SUBMITTED TO: Name: Dr.Shalini Aggarwal Designation: Associate Professor Chandigarh University Location: Gharuan, Mohali

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SUBMITTED BY: STUDENT NAME: Rohit Garg UID: 19MBA 1339 MBA-Batch 2019-21

CERTIFICATE I have the pleasure in certifying that ROHIT GARG is a bonafide student of 2nd semester of the Master’s Degree in Business Administration (Batch 201921), of Chandigarh University, UID-19MBA1339. He has completed his project work entitled ““Company analysis- “POWER FINANCE CORPORATION LIMITED ” under my guidance. I certify that this is his original efforts & has not been copied from any other source. This project has also not been submitted in any other institute/university for the purpose of award of any Degree. Signature: Name of the Guide: Dr. Shalini Aggarwal

Designation: Associate Professor Date: 01/JUNE/2020

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ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am highly indebted to Dr. Shalini Aggarwal for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. I would like to express my gratitude towards my parents & member of Chandigarh University for their kind co-operation and encouragement which help me in completion of this project.

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TABLE OF CONTENT

CHAPTER 1: Introduction

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CHAPTER2: Objective of Study

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CHAPTER 3: Analysis of Market Sector

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CHAPTER 4: Analysis of Company

20-27

CHAPTER 5: Functional Profile Analysis

28-41

CHAPTER 6: Functional Elective Area Analysis

42-59

CHAPTER 7: Learning Outcomes & Limitations

60-61

CAHPTER 8: Conclusion

62

Bibliography

63

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CHAPTER- 1 INTRODUCTION

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INTRODUCTION Power Finance Corporation Ltd is an Indian financial institution. Established in 1986, it is the financial back bone of Indian Power Sector. PFC's Net worth as on 30 September 2018 is INR 383 billion. PFC is the 8th highest profit making CPSE as per the Department of Public Enterprises Survey for FY 2017-18. PFC is India's largest NBFC and also India's largest Infrastructure Finance Company.

Initially wholly owned by the Government of India, the company issued an Initial Public Offering in January, 2007. The issue was oversubscribed by over 76 times, which is one of the largest for an IPO of any Indian Company. PFC is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). It is also an ISO 9001:2000 certified company and enjoys the status of Navratna Company in India. On 6 December 2018, the Government of India approved PFC's takeover of REC. The acquisition transaction was completed on 28 March 2019 with PFC paying almost Rs. 14,500 Cr to the Govt. of India for the 52.63% stake. Power Finance Corporation was 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 the Companies Act, 1956. The company was conferred with the status of Navratna PSU by Government of India on 22nd June, 2007. Under the Navratna status, the government has delegated enhanced powers to CPSEs having comparative advantage and the potential to become global players. The corporation is registered as a Non-Banking Financial Company with the RBI. 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 & modernisation of existing power projects. The Ministry of Power, Central Electricity Authority and PFC are working together to facilitate development of Ultra Mega Power Projects with the capacity of about 4000 MW each under Tariff based competitive bidding route. Being large in size, these projects will meet the power needs of number of states through transmission of power on regional and national grids. The company clients are State Electricity Boards, State Power Utilities, State Electricity/Power Departments, Other State Departments (like Irrigation Department) engaged in the development of power projects, Central Power Utilities, Joint Sector Power Utilities, Equipment Manufacturers and Private Sector Power Utilities The registered office of the company is located in New Delhi, whereas regional offices are in Mumbai and Chennai. Headquarters: New Delhi

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Owner: Government of India Revenue: 402 crores USD (2017–2018) Number of employees: 500 approx. Total assets: 4,332 crores USD (Apr'18) Subsidiaries: REC, PFC Consulting Limited

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CHAPTER- 2 OBJECTIVES OF THE STUDY

OBJECTIVE OF THE STUDY

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• “To analyse the Financial sector in terms of Business, key players and markets.” • “To analyse the Power finance Corporation Limited company in terms of present business, competition position and future growth.” • “To find out job opportunities available within the company and do their analysis.” • “To do in depth analysis of two sectors financial and marketing of the company

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FINANCIAL SECTOR ANALYSIS OF POWER FINANCE CORPORATION LIMITED

FINANCIAL SERVICES SECTOR The financial sector is a section of the economy made up of firms and institutions that provide financial services to commercial and retail customers. This sector comprises a broad range of industries including banks, investment companies, insurance companies, and real estate firms. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. The health of the economy depends, in large part, to the strength of its financial sector. The stronger it is, the healthier the economy. A weak financial sector typically means the economy is weakening. Understanding the Financial Sector

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Many people equate the financial sector with Wall Street and the exchanges that operate on it. But there's much more to it than that. The financial sector is one of the most important parts of many developed economies. It is made up of brokers, financial institutions, and money markets—all of which provide the services needed to help keep Main Street functioning every day. In order for an economy to remain stable, it needs to have a healthy financial sector. This sector advances loans for businesses so they can expand, grants mortgages to homeowners, and issues insurance policies to protect people, companies, and their assets. It also helps build up savings for retirement and employs millions of people.

The financial sector generates a good portion of its revenue from loans and mortgages. These gain value in an environment where interest rates drop. When rates are low, the economic conditions open up the doors for more capital projects and investment. When this happens, the financial sector benefits, meaning more economic growth India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, cooperatives, pension funds, mutual funds and other smaller financial entities. The banking regulator has allowed new entities such as payments banks to be created recently thereby adding to the types of entities operating in the sector. However, the financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64 per cent of the total assets held by the financial system. The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme for Micro and Small Enterprises, issuing guideline to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by both government and private sector, India is undoubtedly one of the world's most vibrant capital markets. In 2017, a new portal named 'Udyami Mitra' has been launched by the Small Industries

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Development Bank of India (SIDBI) with the aim of improving credit availability to Micro, Small and Medium Enterprises' (MSMEs) in the country. India has scored a perfect 10 in protecting shareholders' rights on the back of reforms implemented by Securities and Exchange Board of India (SEBI). The country’s financial services sector consists of the capital markets, insurance sector and non-banking financial companies (NBFCs). India’s gross national savings (GDS) as a percentage of Gross Domestic Product (GDP) stood at 30.50 per cent in 2019. The total amount of Initial Public Offerings increased to Rs 84,357 crore (US$ 13,089 million) by the end of FY18. In financial year 2019, total funds raised stood at Rs 19,900 crore (US$ 2.85 billion). The number of Ultra High Net Worth Individual (UHNWI) is estimated to increase to 10,354 in 2024 from 5,986 in 2019. India has scored a perfect 10 in protecting shareholders' rights on the back of reforms implemented by Securities and Exchange Board of India (SEBI) in World Bank's Ease of Doing Business 2020 report. The asset management industry in India is among the fastest growing in the world. In March 2019, corporate investors Assets Under Management AUM stood at Rs 9,54,627.51 crore (US$ 136.59 billion), while HNWIs and retail investors reached Rs 7,51,666.95 crore (US$ 107.55 billion) and Rs 6,29,848.68 crore (US$ 90.12 billion), respectively. In the Asia-Pacific, India is among the top five countries in terms of HNWIs. The value of alternative investment funds rose from Rs 13,776 crore in June 2016 to Rs 74,817 crore (US$ 10.70 billion) in June 2019. The MF industry’s Assets Under Management (AUM) has grown from Rs 10.96 trillion (US$ 156.82 billion) in October 2014 to Rs 28.18 trillion (US$ 403.32 billion) in January 2020. In FY19, equity mutual funds have registered a record net inflow of Rs 990.87 billion (US$ 14.18 billion). The equity mutual funds registered a net inflow of Rs 4,499 crore (US$ 643.73 billion) in December 2019. Total equity funding's of microfinance sector grew at the rate of 39.88 to Rs 9,631 crore (Rs 4.49 billion) in 2017-18 from Rs 6,885 crore (US$ 1.03 billion) in 2016-17. The public deposit of NBFCs increased from Rs 40,955.54 crore (US$ 5.86 billion) in FY09 to Rs 31,905 crore

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(US$ 4.95 billion) in FY18, registering a compound annual growth rate (CAGR) of 36.86 per cent. The equity mutual funds registered a net inflow of Rs 6,489 crore in September 2019.

In November 2018, Bombay Stock Exchange (BSE) has enabled offering live status of applications filed by listed companies on its online portal and introduced weekly futures and options contracts on Sensex 50 index from October 26, 2018. The Government of India is planning to launch a global exchange traded fund (ETF) in FY20 to raise long term investments from overseas pension funds. The Government of India has taken various steps to deepen the reforms in the capital markets, including simplification of the Initial Public Offer (IPO) process which allows qualified foreign investors (QFIs) to access the Indian bond markets. In 2018, Rs 30,959 crore (US$ 4.43 billion) were raised from initial public offerings (IPOs) whereas Rs 10,300 crore (US$ 1.47 billion) have been raised in H1 2019. As per Union Budget 2019-20, 100 per cent foreign direct investment (FDI) will be permitted for insurance intermediaries. The insurance sector could be opened to 74 per cent FDI from 49 per cent. Government has approved 100 per cent FDI for insurance intermediaries.

EVOLUTION OF INDIAN FINANCIAL SYSTEM Economic development of the nation is completely depending on its financial structure. Both in long run and short run, the financial system and its efficiency dictates the success of the nation in terms of economic growth. The larger, the proportion of financial assets to real assets, the greater the scope of economic growth1. Investments which are considered as the core of financial structure are apre-condition of economic growth. This apart, to sustain growth, continued investment in the growth process is essential. As finance is an important input in the growth process, it has a crucial role to play in the development off economy. The increasing rate of saving is correlated with the increase in the proportion of savings held in the form of

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financial assets relative to tangible assets. The word "system", in the term "financial system", implies a set of complex and closely connected or interlined institutions, agents, practices, markets, transactions, claims, and liabilities in the economy2. The financial system is concerned about money, credit and finance-the three terms are intimately related yet are somewhat different from each other. Indian financial system consists of financial market, financial instruments and financial intermediation. In simple terms, financial system is the set of inter-related activities/services working together to achieve some predetermined purpose or goal3. It includes different markets, the institutions, instruments, services and mechanisms which include the generation of savings, investment capital formation and growth. Van Horne4 defined the financial system as the purpose of financial markets to allocate savings efficiently in an economy to ultimate users either for investment in real assets or for consumption. Christy has opined that the objective of the financial system is to “supply funds to various sectors to activities of the economy in ways that promote the fullest possible utilization of resources without the destabilizing consequence of price level changes or unnecessary interference with individual desires. According to Robinson, the primary function of the system is “to provide a link between savings and investment for the creation of new wealth and to permit portfolio adjustment in the composition of the existing wealth.

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Financial system provides services that are essential in a modern economy. The use of a stable, widely accepted medium of exchange reduces the costs of transactions. It facilitates trade and therefore, specialization in production. Financial assets with attractive yield, liquidity and risk characteristics encourage savings in finical form. By evaluating alternative investments and monitoring the activities of borrowers, financial intermediaries increase the efficiency of resource use. Access to variety of financial instruments enables an economic agent to pool, price and exchange risks in the markets. Trade, the efficient use of resources, saving and risk taking are the cornerstones of a growing economy. In fact, the country could make this feasible with the active support of the financial system. Seekers of Funds (Mainly business firms and government) Suppliers of funds (Mainly households) 41 The financial system5 has been identified as the most catalysing agent for growth of the economy, making it one of the key inputs of development.

Investments/Developments 

In 2019, FPI investments in Indian equities touched a five-year high of Rs 101,122 crore (US$ 14.47 billion).

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Total Merger and Acquisition (M&A) worth US$ 25.162 billion was recorded in first ten months of 2019.

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Total value of Private Equity (PE)/Venture Capital (VC) investments grew 44 per cent over past three years in value terms to reach US$ 48 billion in 2019.

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Mutual Funds asset base stood at Rs 27,22,937 crore (US$ 389.60 billion) at end of February 2020.

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In November 2019, the government will invest Rs 10,000 crore (US$ 1.43 billion) in the Rs 25,000 crore (US$ 3.58 billion) alternative investment fund (AIF).

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In October 2019, ICICI Lombard General Insurance Company acquired Unbox Technologies for an aggregate cash consideration of Rs 225 crore (US$ 32.19 million).

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In 2018, Rs 30,959 crore (US$ 4.43 billion) were raised from initial public offerings (IPOs) whereas in financial year 2019, total funds raised stood at Rs 19,900 crore (US$ 2.85 billion).

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The equity mutual funds registered a net inflow of Rs 6,489 crore in September 2019.

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There were 9,659 non-banking financial companies (NBFCs) registered with the Reserve Bank as on March 31, 2019.

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In FY19, over 3,133 core digital transactions were registered and reached 1,527 crores in FY20 (till September 2019)

The growth of the financial sector in India at present is nearly 8.5 per cent per year. The Government of India has helped in this development, introducing reforms to liberalise, regulate and enhance the country's financial services. Today, India is recognised as one of the world's most vibrant capital markets.

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REPORT OF FINANCIAL SECTOR

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Government Initiatives

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In November 2019, government allocated Rs 10,000 crore to set up AIFs for revival of stalled housing projects.

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Under the Interest Subvention Scheme for MSMEs, Rs 350 crore (US$ 50.07 million) has been allocated under Union Budget 2019-20 for 2 per cent interest subvention for all GST registered MSMEs, on fresh or incremental loans.

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In December 2018, Securities and Exchange Board of India (SEBI) proposed direct overseas listing of Indian companies and other regulatory changes.

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Bombay Stock Exchange (BSE) introduced weekly futures and options contracts on Sensex 50 index from October 26, 2018.

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In September 2018, SEBI asked for recommendations to strengthen rules which will enhance the overall governance standards for issuers, intermediaries or infrastructure providers in the financial market.

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The Government of India launched India Post Payments Bank (IPPB), to provide every district with one branch which will help increase rural penetration. As of August 2018, two branches out of 650 branches are already operational.

Future Goals of financial Services Sector 

India is expected to be fourth largest private wealth market globally by 2028.

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India is today one of the most vibrant global economies, on the back of robust banking and insurance sectors. The relaxation of foreign investment rules has received a positive response from the insurance sector, with many companies announcing plans to increase their stakes in joint ventures with Indian companies. Over the coming quarters there could be a series of joint venture deals between global insurance giants and local players.

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The Association of Mutual Funds in India (AMFI) is targeting nearly five-fold growth in assets under management (AUM) to Rs 95 lakh crore (US$ 1.47 trillion) and a more than three times ...