PFC ₹5,000 crore NCD issue marks one of the largest public bond offerings by a government-backed PSU in recent years. Power Finance Corporation has launched Tranche I of secured Non-Convertible Debentures aimed at retail and institutional investors.
This matters to Indian investors because the issue offers AAA-rated safety, predictable income, and exposure to India’s long-term power infrastructure financing.
Issue Highlights and Key Details
Power Finance Corporation plans to raise funds through a combination of base issue and green shoe option.
The issue opens on January 16, 2026 and closes on January 30, 2026, subject to early closure based on demand.
| Parameter | Details |
|---|---|
| Total Issue Size | ₹5,000 crore (₹500 crore base + ₹4,500 crore green shoe) |
| Minimum Investment | ₹10,000 (10 NCDs) |
| Credit Rating | AAA (CARE, CRISIL, ICRA) |
| Exchange Listing | NSE |
The Securities and Exchange Board of India regulates public NCD issues under disclosure norms issued by SEBI.
Interest Rates and Yield Comparison
PFC offers competitive yields across multiple tenors, especially for retail investors opting for annual interest payouts.
- 5-year tenor: 7.00% per annum
- 10-year tenor: 7.20% per annum
- 15-year tenor: 7.30% per annum (highest annual payout)
These yields compare favourably with bank fixed deposits, particularly for long-term horizons.
Special Series and Investor Suitability
- Zero-Coupon Series: Issued at discount and redeemed at par after 10 years and 1 month
- Cumulative Series: 15-year tenure with compounded interest paid at maturity
- Annual Payout Series: Regular income option for retirees
According to disclosures, at least 75% of the proceeds will support lending to India’s power sector.
Why Investors Consider PFC NCDs
- Backed by a government-owned Maharatna PSU under the Ministry of Finance
- AAA credit rating reduces default risk
- Predictable returns during equity market volatility
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Frequently Asked Questions
Is PFC NCD safe for conservative investors?
PFC carries AAA ratings and government ownership, making it suitable for low-risk investors seeking stable income.
Is interest income taxable?
Yes. Interest is fully taxable as per applicable income tax slab rates under Income Tax Department rules.
Can investors exit before maturity?
Yes. The NCDs are proposed to be listed on NSE, subject to market liquidity.
Key Takeaways
- PFC NCD issue offers safety and predictable returns
- Multiple tenors suit different financial goals
- Best suited for conservative and long-term investors
Disclaimer
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Please consult a qualified professional before making decisions.
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