Third public bond offering in 30 months, includes PSU’s first zero-coupon option
State-owned Power Finance Corporation (PFC) on Thursday launched its third public issue of secured, redeemable non-convertible debentures (NCDs), aiming to raise up to ₹5,000 crore.
Speaking at the launch, Parminder Chopra, Chairperson and Managing Director of PFC, said the strong response to the company’s earlier bond issuances reflected sustained investor confidence in both PFC and India’s power sector. She described the sector as a critical pillar of economic growth and self-reliance, with PFC playing a central role in financing the energy transition.
The issue, which opens for subscription on January 16 and closes on January 30, has a base size of ₹500 crore and a green-shoe option to retain oversubscription up to ₹5,000 crore. Chopra noted that previous public bond issues were subscribed more than five times.
Bond structure and returns
The NCD issue offers multiple series with tenures of 5, 10 and 15 years, including a zero-coupon bond option — the first such public issue by a PSU in the current calendar year. The zero-coupon series is structured to nearly double investor capital over a 10-year period, with returns taxed as long-term capital gains.
Other series offer cumulative interest options, under which investments can grow to nearly three times over a 15-year horizon, providing flexibility for both retail and institutional investors.
Financial strength and asset quality
Chopra said PFC has financed close to 50% of India’s installed power capacity and had a loan book of ₹5.61 lakh crore as of September 2025. The company reported profits of nearly ₹8,900 crore in the first half of the current financial year.
She also highlighted a sharp improvement in asset quality, with net NPAs declining to 0.37%. Thermal power exposure has reduced significantly, while incremental lending is now focused on power distribution, renewables and hydro projects. PFC has supported 64 GW of renewable capacity, with its renewable portfolio growing over 32% in H1 FY26.
Open to nuclear financing, awaits policy clarity
PFC is open to funding nuclear power projects but will proceed only after receiving clear policy guidance from the government. Chopra said viability, fuel sourcing and power offtake certainty would be key considerations before entering the sector.
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