I would not necessarily agree with the fact that IREDA should get a premium.
The real opportunity is in financing the utility scale projects for a longer term (otherwise, it gets refinanced through foreign borrowing) – therefore, cost of the funds is crucial in this business. As far as financing the RE sector is concerned, PFC/REC have been in the business for long and understand its nuances well. Infact, financing state thermal sector is better as they are cost plus and don’t have re-financing risk – these contracts are also long term and have implicit or explicit state guarantee (which makes them virtually an arbitrage business).
Have been in the Power Sector for a long period and can say they have good people assessing the projects…
Disclosure: Have been invested in both PFC/REC for 4-5 yrs
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