Power Finance Corporation NCD IPO

Power Finance Corporation Limited (PFC) NCD Tranche I (Jan 2026) is a ₹5,000 crore secured public issue from a AAA‑rated Maharatna PSU, offering fixed coupons up to about 7.30% per annum across 5–15 year tenors and targeting investors seeking stable, taxable income from a government‑backed NBFC.

PFC NCD Jan 2026 – key details

• Issuer: Power Finance Corporation Limited – Maharatna CPSE, RBI‑regulated NBFC focused on financing power sector projects in generation, transmission and distribution.​
• Issue type: Secured, rated, listed, redeemable non‑convertible debentures (NCDs) with face value ₹1,000 per NCD (except zero‑coupon series where the effective face value is higher).
•  Shelf / Tranche: Public Issue of NCDs FY 2025‑26, Tranche I. ​
• Coupon rate :- Upto 7.05% p.a.
• Issue size:
  • Base issue: ₹500 crore.​
  • Issue size: ₹4,500 crore.
  • Total Tranche I size: ₹5,000 crore – the largest retail bond issue in nearly 8 years.​
• Issue period:
  • Opening date: 16 January 2026.business ​
  • Closing date: 30 January 2026 (with provision for early closure/extension as per SEBI rules). ​
• Listing: Proposed on NSE; NSE designated stock exchange for the public issue.
• Credit rating:
  • CARE: “CARE AAA; Stable”.​
  • CRISIL: “CRISIL AAA/Stable”.
  • ICRA: “[ICRA] AAA (Stable)” – indicating very strong degree of safety and low credit risk.​
• Objective of the Issue :
  • Minimum 75% of net proceeds for onward lending, financing/refinancing existing borrowings, and servicing interest/principal.
  • Up to 25% for general corporate purposes.​
  • Funds from zero‑coupon NCDs to be used solely for onward lending.

Company Financials (Restated Consolidated)

Coupon, options and investor categories

• Tenors and options (indicative from Tranche I term sheet):
  • Tenor options around 5 years, 10 years, 10 years and 1 month, and 15 years.
  • Both annual interest payment options and cumulative (at‑maturity) options for longer tenors.
  • Zero‑coupon NCD (approx 10 years and 1 month) with implied yield up to about 6.95% for retail.​
• Categories:
  • Category I – Institutional investors.
  • Category II – Non‑institutional / corporates.
  • Category III – High Net‑Worth Individuals (HNIs).
  • Category IV – Retail individual investors (up to ₹10 lakh).
• Minimum application:
  • Minimum 10 NCDs of ₹1,000 each (₹10,000) and in multiples of 1 NCD thereafter, as per exchange filing.

How to invest in the NCD

Retail investors (up to ₹5 lakh) can apply via NSEgoBID and BSEDirect online platforms or through select intermediaries and brokers that support NCD IPO applications. The process generally includes:​

• Logging into Bondskart
• Entering bid details (series, quantity, price) and providing DP and bank/ASBA or UPI credentials.
• Approving the UPI mandate (for UPI‑based applications) to confirm the bid.​

The minimum investment is typically 10 NCDs (₹10,000), with subsequent orders in multiples of one NCD as per standard public NCD norms. Post‑closure, allotment status can be checked on BSE or the registrar’s website using PAN or Aadhaar details, and NCDs are credited to the demat account on allotment.​

Strengths

• AAA‑rated NCD issue backed by a Maharatna CPSE, offering very high degree of safety of timely interest and principal compared to most corporate issuers.
• PFC is one of India’s largest power‑sector financiers with strategic importance for the government’s generation, transmission and distribution projects, reducing business‑continuity risk.
• Attractive coupon rates in the 6.85%–7.30% range provide higher fixed income than typical large‑bank FDs of comparable maturities.
• Multiple tenors (5–15 years) plus annual and cumulative options allow investors to align cash flows with goals like children’s education, retirement or regular income. Public issue structure with NSE listing offers secondary market liquidity, enabling exit before maturity (subject to demand and price).
• Low minimum application of ₹10,000 makes the PFC NCD accessible to small retail investors as well as HNIs.business-standard+1​

Risks

• Interest‑rate risk: If market interest rates rise in future, the price of listed NCDs can fall, causing mark‑to‑market loss if sold before maturity.
• Credit‑spread risk: While PFC is AAA‑rated, any downgrade in the company or sovereign outlook can negatively affect NCD prices and yields.
• Sector concentration risk: PFC’s loan book is heavily concentrated in the power sector, which is exposed to regulatory changes, DISCOM health, and project delays.
• Liquidity risk on exchange: Secondary‑market volumes may be thin, especially for certain series, leading to wider bid‑ask spreads when exiting.
• Reinvestment risk for shorter‑tenor NCDs—on maturity, investors may not find equally attractive risk‑adjusted rates if interest‑rate cycle moves down.
• No indexation or special tax benefits; interest from PFC NCDs is fully taxable at slab rate, which reduces post‑tax yield, especially for high‑slab investors.​

NCD Review

This is the 10th debt offer from PFCL since February 2011. The last debt issue was in January 2023. The company is Schedule-A Maharatna PSU engaged in power sector financing across the board. The company marked steady growth in its top and bottom lines for the reported periods. This debt offer has AAA/Stable ratings from CRISIL, CARE and ICRA. Based on its rating, the coupon rates are in line with the market trends. Investors looking for a long term steady return, may park funds.

FAQ’s:-

1. What is Power Finance Corporation Limited NCD Tranche I January 2026?
Power Finance Corporation Limited (PFC) NCD Tranche I is a secured, AAA-rated public issue of up to ₹5,000 crore from India's leading Maharatna PSU NBFC focused on power sector financing.

2. When does the PFC NCD public issue open and close?
PFC NCD Tranche I opens for subscription on 16 January 2026 and closes on 30 January 2026, with listing proposed on NSE.angelone+2​

3. What are the PFC NCD interest rates and tenors?
PFC NCD offers coupons ranging from approximately 6.85%–7.30% across 5-year, 10-year, 10-year+1-month, and 15-year tenors, with annual interest payment and cumulative options available.

4. What is the minimum application amount for PFC NCD retail investors?
Retail investors (Category IV) can apply for a minimum of 10 NCDs at ₹1,000 face value each (total ₹10,000), making it accessible to small investors.

5. What are the credit ratings and safety profile of PFC NCD?
PFC NCD carries the highest ratings of CARE AAA(Stable), CRISIL AAA/Stable, and ICRA AAA(Stable), indicating very strong safety for principal and interest payments.