PNB Meja Urja Internship Final

8/3/2019 PNB Meja Urja Internship Final

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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



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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



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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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PNB Meja Urja Internship Final

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