Power Finance Corporation (PFC) announced plans to raise ₹5,000 crore through a non-convertible debenture (NCD) issue, the country’s largest retail issue of bonds in nearly 8 years.
The company will issue NCDs of 15-year tenor, and offer a coupon rate of 7.3% payable on an annual basis. The base size of the issue is ₹500 crore with a greenshoe option of ₹4,500 crore.
If the company can raise the full quantum, it would be the largest public bond issue since May 2018, Reuters reported, citing data from the Securities and Exchange Board of India.
The Maharatna PSU has filed tranche I prospectus dated January 9, 2026, for public issue of secured, rated, listed, redeemable, non-convertible debentures of the face value of ₹1,000 each. The base issue size is ₹500 crore with a green shoe option of up to ₹4,500 crore, aggregating up to ₹5,000 crore, which is within the shelf limit of ₹10,000 crore, PFC said in a statement.
The Tranche I issue opens on Friday, January 16, 2026, and closes on Friday, January 30, 2026 with an option of early closure or extension in compliance with the Sebi regulations. The NCDs are proposed to be listed on National Stock Exchange of India Limited (NSE), with NSE being the Designated Stock Exchange for the Issue.
The NCDs have been rated “CARE AAA; Stable” by CARE Ratings Limited, “Crisil AAA/Stable” by Crisil Ratings Limited and “[ICRA] AAA (Stable)” by ICRA Limited, PFC said.
PFC will sell bonds maturing in 5 years, 10 years, 10 years and 1 month, and 15 years.
The company will offer an annual coupon of 6.85% to institutional investors and corporates for five-year bonds, and 7.00% and 7.05% for 10-year and 15-year tenors, respectively.
For high-net-worth individuals, the state-run firm would pay an additional 5 basis points, 10 bps, and 15 bps, and retail investors an annual coupon of 7.00%, 7.20%, and 7.30% for the five-year, 10-year, and 15-year paper, respectively.
PFC has also introduced a zero-coupon option for investors with a 10-year and 1-month maturity, offering a yield of 6.80% to institutional players and companies, 6.85% to HNIs, and 6.95% to retailers.
The fifth option offered by PFC is also a 15-year paper, with the option to make a direct payment at maturity. The yield for this note is 7.05% for the first two categories, and 7.20% and 7.30% for HNIs and retail investors, respectively.
Out of the net proceeds of the Tranche I Issue, at least 75% shall be utilised for the purpose of onward lending, financing / refinancing the existing indebtedness of the company, and /or debt servicing and a maximum up to 25% will be utilised for general corporate purposes.
The funds raised from the issuance of zero coupon NCDs shall be utilised towards only the purpose of onward lending and shall not be used for any other purpose, the PSU said.
AK Capital Services, Tip Sons Consultancy Services, Nuvama Wealth Management, and Trust Investment Advisors are the lead managers.
PFC Share Price History
PFC share price has gained 8% in one month and has fallen 14% in the past six months. The PSU stock has dropped 7% in two years, but has delivered multibagger returns of 282% in the past five years.
On Monday, PFC share price ended 3.47% higher at ₹371.50 apiece on the BSE.
(With inputs from Reuters)
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