Hydropower generator NHPC plans to start parking surplus funds in debt-based mutual funds of

RELATED ARTICLES NHPC posts 28% rise in profit at Rs 2,772 cr for FY12

public sector companies such as SBI, LIC and UTI for better returns. The company is yet to utilise the Rs 4,000 crore proceeds received from its initial public offer (IPO) last year, its chairman and managing director SK Garg said. The company is sitting on a cash reserve of Rs 5,000 crore.

“Safety is our main concern. The company’s board is working towards an investment policy to decide on how to park surplus funds. The policy has to be drafted keeping the finance ministry guidelines in mind,” Garg said.

The government has allowed profit-making PSUs to invest 30 per cent of their money in public sector mutual funds.

NHPC had earlier sought relaxation from the guidelines of department of public enterprises on parking of surplus funds without asking for bids from banks, saying it will lose heavily on interest income. At present, the company deposits funds with banks that yield a return of around 7 per cent.

NHPC had mopped up Rs 6,048 crore from its IPO, of which Rs 2,013 crore went to the government. The proceeds are intended to fund projects expected to start within two years. The company had constituted a committee of directors to suggest high-return options for investing the money.

Garg said the company was also looking at investing in PSU bonds and long-term deposits.

The company reported over 94 per cent growth in its net profit at Rs 2,090 crore for 2009-10 on one-time payment of arrears from revised tariffs. Net profit during 2008-09 stood at Rs 1,075 crore.

“Tariffs for Dulhasti (J&K), Chamera (Himachal) and Teesta-V (West Bengal) projects were finalised by electricity regulator CERC, which contributed nearly Rs 816 crore in our profit. However, this is just a one-time entry,” NHPC director finance ABL Srivastava said.

The company generated 16,960 million units of power in 2009-10. It seeks to add 800 mw of generation capacity in the present financial year. The company plans to generate 9,500 mw power by 2012 compared with its 5,175 mw capacity at present.

The NHPC scrip closed at Rs 28.30, up 0.89 per cent, on the Bombay Stock Exchange on Tuesday.