State-owned Power Finance Corporation (PFC) has launched Tranche I of its public issue of secured, listed, and redeemable non-convertible debentures (NCDs), aiming to raise ₹50 billion (~$554.18 million) as part of its broader ₹100 billion (~$1.108 billion) shelf program.

Under Tranche I, PFC plans to raise ₹5 billion (~$55.42 billion) as the base issue size, with a greenshoe option to retain oversubscription of up to ₹45 billion (~$498.76 million), taking the total issue size to ₹50 billion (~$554.18 million).

The issue will open for subscription on January 16, 2026, and close on January 30.

The subscription may be closed earlier, subject to regulatory limits and minimum subscription requirements.

The gross proceeds of ₹50 billion (~$554.18 million) will be utilized after deducting issue-related expenses estimated at around ₹216 million (~$2.39 million).

The net proceeds will be used primarily to lend, finance, or refinance existing debt and to service borrowings, including the repayment or prepayment of interest and principal. It may also be used for general corporate purposes, consistent with PFC’s role as a key financier to India’s power and infrastructure segment.

The debentures will be listed in the National Stock Exchange, which has granted in-principle approval for the listing.

The NCDs offered in this issue are secured, providing a minimum-security cover of 100% of the outstanding principal and interest. The Tranche I issue is not underwritten. The minimum subscription requirement is 75% of the base issue size, or ₹3.75 billion (~$41.56 million). If the minimum subscription is not met, the application funds will be unblocked and refunded to investors in accordance with the Securities and Exchange Board of India’s regulations.

With the launch of this issue, PFC aims to strengthen its funding base and support continued lending to the power sector, as investments in generation, transmission, distribution, and clean energy infrastructure are gaining momentum.

In the financial year 2025, PFC mainly lent to the government sector, which accounted for 77% of the loans disbursed, with the remainder going to the private sector. Its loan assets totaled ₹5.43 trillion (~$63.43 billion), and loan disbursements reached ₹1.68 trillion (~$19.62 billion).

Last year, PFC signed a loan agreement for €150 million (~$174.49 million) with KfW Development Bank, a German state-owned investment and development bank. PFC will utilise the loan proceeds to finance projects under the Indian government’s Revamped Distribution Sector Scheme.