Transcript
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CREDIT APPRAISAL
OFMEJA URJA NIGAM PRIVATE LIMITED
@PUNJAB NATIONAL BANK
Circle Office Varanasi
@
Presented by:-Yash Deep Srivastava2010MB46
MNNIT- Allahabad
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Outline Introduction of PNB PNB Financials
Research methodology
Over view of Credit appraisal
Factors for credit appraisal
Credit appraisal process
The project Introduction
Project structure
Physical progress of project
Sensitivity analysis
Risk analysis
P & L account of project
Balance sheet analysis
Cash flow analysis
Conclusion
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Introduction Of Organization
Punjab National Bank was founded in 1894
PNB is the second largest state-owned
commercial bank in India.
It has about 5000 branches across 764 cities.
It serves over 37 million customers.
The bank has been ranked 248th biggest bank in
the world by the Bankers Almanac, London.
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PNB Financials
Parameters Mar'09 Mar'10 Mar'11 CAGR(%)Operating Profit 5690 7326 9056 26.16Net Profit 3091 3905 4433 19.76Deposit 209760 249330 312899 22.14Advance 154703 186601 242107 25.10Total Business 364463 435931 555005 23.40
Rupees in CroresSource : www.pnb.org
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Research Methodology
RESEARCH PROJECT Power project on meja urja nigam private limited
RESEARCH DESIGNAnalytical in nature.
DATA COLLECTION Primary:- Discussion with credit manager and other
staff members at Punjab National Bank.
Secondary:- Books, websites, Database at PNB
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Contd.
OBJECTIVE OF INTERNSHIP
To get the practical knowledge of creditmanagement in the organization.
To study the credit appraisal methods.
To understand the commercial, financial &
technical viability of the proposal proposed and itsfinding pattern.
To get a good insight of banking industry.
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Limitations
Some technicalities are not revealed
Time constraints -> limited areas
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Overview of Credit Appraisal
Process of appraising the credit worthiness of aLoan applicant.
A process to ascertain the risks associated with the
extension of the credit facility.Organizations come for
Working Capital finance
Term loan for mega projects NFBL
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Factors for Credit Appraisal
Financial performance
Business performance
Industry outlook
Quality of management
Conduct of account
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Credit Appraisal Process
Receipt of application from applicant
Receipt of documents
(Balance sheet, KYC papers, Different govt. registrationno., MOA, AOA, and properties documents
Pre-sanction visit by bank officers
Check for RBI defaulters list, willful defaulterslist, CIBIL data, ECGC, Caution list etc
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Contd
Valuation reports of the properties to be obtained fromempanelled valuer/engineers
Preparation of financial data
Proposal preparation
Sanction/approval of proposal by appropriate sanctioning authority
Title clearance reports of the properties to be obtainedfrom empanelled Advocates
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Contd.
Documentations, agreements, mortgages
Disbursement of Loan
Post sanction activities such as receiving stock statements,
review of accounts, renew of accounts, etc(On regular basis)
Assessment of proposal
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THE PROJECT
Meja Urja Nigam Private Limited(MUNPL)
&
Uttar Pradesh Rajya VidyutUtpadan Nigam Limited
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Introduction of Project
Its a Thermal Power project.
Formed as a 50:50 joint venture between
National thermal Power corporation Limited(NTPC) and Uttar Pradesh Rajya Vidyut UtpadanNigam Limited (UPRVUNL)
A green-field project, with a capacity of 1320 MW(2 X 660 MW).
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Project Cost and Means of Finance
The total cost estimated Rs. 10,821.10 crore isproposed to be financed in a debt-equity ratio of70:30 which translates to a debt of Rs. 7,574.77
crore and equity of Rs.3,246.33 crore.
The total debt requirement is proposed to beraised as long-term Debt from domestic banks /
Financial Institutions (FIs) with 15 year door-to-door tenor i.e. principal repayment of 10 years aftera moratorium of 5 years.
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Location of Project
Meja tehsil in Allahabad
Meja ProjectMeja Project
Source: DPR of MUNPL
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Proposed Project Structure
Source: DPR of MUNPL
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Physical Progress of the Project
Physical possession of acquired land has been obtainedand fenced
Construction of enabling township consisting of 100dwelling units, CISF barracks, armoury and townshipboundary are about to complete.
Construction water is available through bore-well.
Construction power is available through 33/11 kVsubstation at project site, which is already charged andlive.
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Sensitivity Analysis of Project
Scenario Avg. DSCR Min. DSCR
Base Case1.45 1.36
Increase in Coal price escalation rate by 1%
1.45 1.36
Mix of Domestic & Imported Coal1.45 1.36
Increase in Interest rate by 1% for Term Debt1.43 1.33
Decrease in Plant Availability by 5%1.41 1.32
Increase in O&M escalation rate by 1%1.43 1.35
Source: DPR of MUNPL
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Risk Analysis
Risk Mitigation Measure
Availability ofwater
GoI has approved drawl of 44 cusecs of water from River Ganga
Fuel price
escalation
The primary fuel (coal) will be supplied from SECL coal mines at Rs.
1,430 per tonne . any change in fuel price is a pass-through to thebeneficiaries in line with CERC norms. Hence MUNPL will be insulatedfrom fuel price risk
Demand &
tariff risk
UP is continuously facing power deficit, it is expected that sufficient
demand will exist in UP .
Cost and timeoverrun
The project is proposed to be implemented through award of well-defined contract packages. The contracts will include provisions forliquidated damages for delay in implementation so as to protectMUNPL against cost and time over runs.
Hence, the risk associated has been considered as low.
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Timeline for Project - Unit
wise
Particulars Unit 1 Unit 2
Capacity (MW) 660 660
Notice to Proceed (NTP) April1, 2011 April 1, 2011
No. of Months of
Construction 52 58
COD August 1, 2015 February 1, 2016
End of Life of Unit August 1, 2040 February 1, 2041
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Projected Profit and LossAccount Source: DPR of MUNPL
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Projected Balance Sheet Source: DPR of MUNPL
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Conclusion
Norms for providing loans are flexible & it may differfrom case to case.
In all, the viability of the project from every aspect hasanalyzed.
The funding pattern & collateral security cover are
available for the recovery of credit.
The project is commercially , financially & technicallyviable.
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THANK YOU !
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