New Delhi: REC Limited, a Maharatna Central Public Sector Enterprise and a leading Non-Banking Financial Company (NBFC) under the Ministry of Power, has secured approval from the Central Board of Direct Taxes (CBDT), Ministry of Finance, for the issuance of ₹5,000 crore Zero Coupon Bonds (ZCBs).
The approval, granted under Notification No. 52/2025 dated 30th May 2025, authorizes REC to issue five lakh Zero Coupon Bonds with a tenure of 10 years and 6 months, aggregating to a total issuance size of ₹5,000 crore.
What Are Zero Coupon Bonds?
These ZCBs are issued at a deep discount to face value and redeemed at par on maturity, offering significant tax advantages to investors under the Income-tax Act, 1961. The bonds do not pay periodic interest but instead provide returns through capital appreciation at maturity.
Read Also: REC Ltd and BHEL Form Joint Venture for Renewable Energy and Infrastructure Projects
Success of Previous Issuance Sets Benchmark
REC had earlier issued a similar tranche of Zero Coupon Bonds in the FY 2024–25, which saw a phenomenal market response. The ₹5,000 crore issuance received subscriptions nearly seven times the offer size, underscoring investor confidence in REC’s creditworthiness.
The bonds were issued at a yield of 6.25%, which was about 100 basis points lower than prevailing market rates, establishing a new benchmark for such debt instruments in the market.
Read Also: REC Ltd to Raise Rs 1.7 Lakh Crore in FY 2025-26 via Bonds and Loans
Strategic Importance and Future Plans
The success of the previous issue enabled REC to tap into new investor segments and diversify its funding sources at competitive rates. This latest issuance will further strengthen REC’s ability to mobilize funds efficiently to support India’s expanding energy infrastructure.
A spokesperson for REC said, “We remain committed to exploring innovative financial instruments that align with our vision of powering India’s growth and infrastructure development.”
About REC
REC Limited (formerly Rural Electrification Corporation Limited) is a Maharatna Central Public Sector Undertaking (CPSU) under the Ministry of Power, Government of India. Established in 1969, REC is a leading non-banking financial company (NBFC), playing a pivotal role in financing and promoting power sector development across India.
