State-run lender Power Finance Corp is mulling setting up a subsidiary to mainly fund

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Indian firms for their coal mine purchases abroad.

Besides, the subsidiary may also look at other financing aspects of the power projects in India, sources said.

"PFC is thinking of starting a subsidiary for funding back-end processes in the power sector, like mine development, funding private companies for coal mine acquisition etc," a source close to the development said.

However, he did not divulge further details, saying that the proposal was at a nascent stage.

On being asked about proposed subsidiary, PFC CMD Satnam Singh told PTI, "Some Indian companies have come to us, they want coal mines abroad. They came to us for funding."

"Right now there is a unit in PFC which looks after it. After we establish the business, then we can look at setting up a subsidiary, not right now."

He did not share the names of the companies PFC is in talks with for funding their overseas ventures.

Experts say that such a subsidiary would give a boost to the company's portfolio.

"As a finance company if they finance more projects, that would lead to a bigger loan book," Jagannathan Thunuguntla of SMC Global Securities said, adding that, "Though it is a diversification for the company, it is in the related areas."

PFC already has four subsidiaries -- PFC Consulting, PFC Green Energy, PFC Capital Advisory Services and Power Equity Capital Advisors, which cater to the various funding aspects in the power sector.