REC Limited has successfully raised ₹5,000 crore through its CBDT-notified Zero Coupon Bonds (ZCBs), achieving an effective yield of 6.25 percent per annum. The issuance garnered strong demand, being oversubscribed by seven times its original size.
These ZCBs are issued at a significant discount and redeemed at face value, providing tax benefits to investors due to the CBDT notification. Upon maturity, the redemption is classified as long-term capital gains, attracting a lower tax rate of 12.5 percent per annum.
All four major credit rating agencies—CARE, CRISIL, ICAR, and IRRPL—assigned a top rating of AAA to this bond issuance. Notably, the last issuance by REC occurred in the financial year 2010-11.
With a net pay-in of ₹2,712.50 crore, the bonds are scheduled for settlement on September 3, 2024, and will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This successful issuance underscores REC Limited’s strong position in the capital market and its commitment to providing investment opportunities with favorable returns.
