REC Limited has reported a 15.2% fall in its net profit during the financial year (FY) ending March 31, 2020, attributing it to market volatility as a result of the ongoing coronavirus pandemic.

REC said that its net profit during the year fell to ₹48.86 billion (~$649.5 million) from ₹57.64 billion (~$766.17) in the previous year, citing a sharp depreciation in the Indian currency during the fourth quarter (Q4) of 2020 as a result of the COVID-19 crisis. It noted that its profits were down despite healthy operational performance.

The company, however, noted that its total income during the financial year was up 18% annually and stood at ₹298.55 billion (~$3.96 billion). It said that its loan book grew 15% over the year, with total loans standing at ₹3.220 trillion (~$42.8 billion) overall. It said that it had disbursed loans worth ₹756.67 billion (~$10.06 billion) during the year, a 4.8% increase from the year before.

On the renewables front, the company posted that it had approved loans worth $70.26 billion (~$933.9 million), amounting to about 6% of all loans granted across sectors during the year. This was down from ₹118.75 billion (~$1.58 billion), or 10% of total loans sanctioned in the previous year.

During Q4 2020, REC said it approved ₹5.24 billion (~$69.6 million) in loans to renewables accounting to 4% of the total loans extended during the quarter. This was down from ₹15.87 billion (~$210.9 million), or 7% of overall loans disbursed in Q4 2019.

Elaborating on actual disbursement of loans, ₹56.99 billion (~$757.5 million), 7% of all disbursements were made for renewables during the year. Of this, ₹9.58 billion (~$127.3 million) was disbursed just during the quarter ending March 31, 2020.

Outstanding loans from the renewable energy sector at the end of FY 2020 stood at ₹160.78 billion (~$2.14 billion), accounting for 5% of overall outstanding loans. This was up from ₹129.95 billion (~$1.73 billion) in the previous year.

Maharashtra State Electricity Distribution Company Limited, Tamil Nadu Generation and Distribution Corporation, and Maharashtra State Power Generation Company Limited were the top three borrowers, REC added.

It also said it had raised funds to the tune of ₹200 billion (~$2.66 billion) after March 31, 2020, from domestic and international markets. The company said that this included ₹500 million (~$37.62 billion) in U.S. dollar bonds and that REC was the first Indian company to raise funds through bonds during the COVID-19 pandemic.

REC explained that its strong information technology capabilities and the availability of various applications online helped the company continue business operations without any disruptions resulting from the lockdown.

It said that the company’s decision to allow its customers to opt-in for the moratorium made available between March 31, 2020, and May 31, 2020, has helped it recover more than 78% of its total recoverable dues of ₹95 billion (~$1.26 billion) due for March 2020.

“Considering the company’s liquidity position and access to diverse sources of funds, we have been able to steer through the challenging times without any pressures. The situation has been under close watch by the management to take prompt actions in the best interest of the company and the stakeholders in an optimized manner,” said Sanjeev Kumar Gupta, Chairman & Managing Director and Director (Technical) at REC Limited.

“Several government announcements as COVID-19 relief measures will further improve liquidity position for NBFCs (non-banking financial institutions) and pave the way for power sector reforms,” Gupta added.

REC Limited recently announced an opportunity for the distribution companies to avail loans to clear their dues. The loans under this program will be co-funded by REC and Power Finance Corporation (PFC) in equal amounts. As per the announcement, 50% of the loan will be provided in Tranche-I, and the rest will be provided in Tranche-II.

This came on the heels of the government’s economic stimulus package in which it announced that DISCOMs would receive ₹900 billion (~$12.03 billion) to help the Indian economy recover from the coronavirus crisis.