PFC launches third public NCD issue, eyes ₹5,000 crore fundraising

Power Finance Corporation (PFC) on Thursday launched its third public issue of secured, redeemable non-convertible debentures, with Chairperson and Managing Director Parminder Chopra calling the strong investor response to its earlier bond offerings a clear vote of confidence in the power sector.

Chopra said the sector remains a fundamental pillar of India's growth and self-reliance, with PFC acting as the key financial enabler of the transition.

The company plans to raise up to Rs 5,000 crore through the public NCD issue, which comes after nearly 30 months, with a base issue size of Rs 500 crore and a green-shoe option to accept oversubscriptions up to the full amount.

 

The public NCD issue the company's third such offering and the first zero coupon public bond issue by a PSU in the current calendar year is set to open for subscription on January 16 and run through January 30.

Chopra noted that previous issues were subscribed more than five times.

This third issue reflects maturity, continuity and a long-term commitment, he told reporters here.

The NCD issue offers multiple series with tenures of 5, 10 and 15 years, including a zero-coupon bond option, a first for a PSU in the public bond market. The zero-coupon option is structured to nearly double the investment 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.

Highlighting the company's financial strength, Chopra said PFC has financed nearly 50 per cent of India's installed power capacity, with a loan asset book of Rs 5.61 lakh crore as of September 2025.

It reported a profit of close to Rs 8,900 crore in the first half of the current financial year, she said.

These numbers reflect our resilience and long-term vision, Chopra added.

PFC keen to fund nuclear power projects, awaits govt policy clarity

State-owned PFC is open to financing nuclear power projects but will move ahead only after the government lays down a clear policy framework, company Chairperson Parminder Chopra said on Thursday.

Chopra said funding nuclear projects would require careful evaluation of viability and revenue certainty, including clarity on fuel sourcing and power offtake arrangements.

"We have to see the viability and have assurance of the revenue -- from where they are going to get the fuel and to whom they are going to supply the power," she said, speaking on the sidelines of the launch of the third taxable public issue of NCDs of up to Rs 5,000 crore.

The company is awaiting government guidelines before framing its internal policies for funding the sector.

"Once we have some clarity on the policy front of the government, based on those guidelines we will frame internal policies also," Chopra said, adding that PFC would rely on its existing appraisal mechanism once the policy environment is in place.

The Union Budget 2025-26 outlines a significant push towards nuclear energy as part of India's long-term energy transition strategy. The government has set an ambitious target of 100 GW of nuclear power capacity by 2047.

Meanwhile, Chopra highlighted a sharp improvement in PFC's asset quality, with the net non-performing asset (NPA) ratio declining to 0.37 per cent at present. She attributed the stress seen in the mid-2010s to the Supreme Court's deallocation of coal mines, which led to the cancellation of power purchase agreements and rendered several projects unviable.

The remaining bad loans, amounting to Rs 10,400 crore, are from the private sector only, and 80 per cent of these are fully provided for, with the assets either already under liquidation or undergoing resolution, she said.

For the remaining around Rs 2,000 crore of NPA debt, restructuring negotiations are in progress, she added.

Asked about the sharp improvement in NPAs and gross stage III assets, Chopra said it was largely due to the resolution of two very large accounts.

Chopra also said that PFC has significantly reduced its exposure to coal-based power projects as part of a strategic shift. Thermal exposure has come down from about 80 per cent to nearly 42 per cent.

She said incremental lending is now largely focused on power distribution and renewable energy, including hydro projects. At present, generation and distribution together account for about 86 per cent of PFC's portfolio, while renewables and hydro comprise around 12-13 per cent. However, this share will grow gradually, she said.

PFC has so far supported 64 GW of renewable energy capacity, with its portfolio reaching Rs 84,679 crore, expanding at over 32 per cent in the first half of FY26. Chopra, however, said this high rate of growth may not be sustainable as the base grows, but traction will continue.