Power Finance Corporation, a Maharatna public sector unit, is gearing up for a significant financial move. The company plans to raise ₹5,000 crore through non-convertible debentures. This marks the largest retail bond issue in India in nearly eight years.
Issue Details and Timeline
The NCD issue opens on January 16, 2026, and will close on January 30. PFC retains the option to extend or close the issue early, following SEBI regulations. The company filed the tranche I prospectus on January 9, 2026.
The base issue size is set at ₹500 crore. However, PFC includes a greenshoe option of ₹4,500 crore. This brings the total potential raise to ₹5,000 crore. The entire amount falls within the company's shelf limit of ₹10,000 crore.
Bond Tenure and Coupon Rates
PFC will issue NCDs with a 15-year tenor. Retail investors can expect an attractive annual coupon rate of 7.3%. The bonds come with a face value of ₹1,000 each.
The company offers multiple investment options. These include bonds maturing in 5 years, 10 years, 10 years and 1 month, and 15 years. Coupon rates vary for different investor categories.
For institutional investors and corporates, the five-year bonds carry a 6.85% annual coupon. The 10-year and 15-year tenors offer 7.00% and 7.05% respectively.
High-net-worth individuals receive slightly higher rates. They get an additional 5 to 15 basis points across different tenors. Retail investors enjoy the most favorable terms with 7.00%, 7.20%, and 7.30% for five, ten, and fifteen-year papers.
Zero-Coupon and Direct Payment Options
PFC introduces innovative bond structures. A zero-coupon option is available for the 10-year and 1-month maturity. This offers yields of 6.80% for institutions, 6.85% for HNIs, and 6.95% for retail investors.
Another option features a 15-year paper with direct payment at maturity. Yields for this note are 7.05% for institutions and corporates. HNIs get 7.20%, while retail investors receive 7.30%.
Credit Ratings and Listing
Leading credit agencies have assigned top ratings to these NCDs. CARE Ratings gives them "CARE AAA; Stable." Crisil Ratings awards "Crisil AAA/Stable." ICRA Limited rates them "[ICRA] AAA (Stable)."
The bonds will list on the National Stock Exchange. NSE serves as the designated stock exchange for this issue.
Utilization of Funds
PFC plans to use the net proceeds strategically. At least 75% will support onward lending activities. This includes financing or refinancing existing debt and servicing current obligations.
A maximum of 25% is allocated for general corporate purposes. Funds from zero-coupon NCDs have specific restrictions. They must go exclusively toward onward lending projects.
Lead Managers and Market Context
AK Capital Services, Tip Sons Consultancy Services, Nuvama Wealth Management, and Trust Investment Advisors are managing the issue. Their expertise will guide this substantial fundraising effort.
Reuters reports this could become the largest public bond issue since May 2018. The data comes from the Securities and Exchange Board of India.
PFC Stock Performance
Investors show keen interest in PFC's stock movements. The share price gained 8% over the past month. However, it fell 14% in the last six months.
Looking at a two-year horizon, the stock dropped 7%. But the long-term picture tells a different story. PFC shares delivered multibagger returns of 282% over five years.
On Monday, PFC shares closed 3.47% higher at ₹371.50 on the BSE. This positive movement reflects market anticipation for the NCD issue.
The company's financial strategy demonstrates confidence in India's power sector. This bond issue provides retail investors with a secure, high-yield investment opportunity. It also strengthens PFC's position in the infrastructure financing landscape.
