Public infrastructure finance company, REC Limited has received approval from the Central Board of Direct Taxes (CBDT) to issue 500,000 zero-coupon bonds aggregating to ₹50 billion (~$582.25 million).

The bond issue is part of REC’s effort to tap into innovative instruments for efficient fund mobilization to support India’s growing energy infrastructure needs.

The bonds will be issued for a tenure of ten years and six months.

Zero-coupon bonds are issued at a deep discount and are redeemable at face value upon maturity. It provides significant tax advantages to investors under the Income Tax Act 1961.

Previously, REC had issued zero-coupon bonds for a similar sum in FY 2025. The bond issuance received nearly seven times the number of subscriptions. It was issued at a yield of 6.25%, almost 100 basis points lower than prevailing market rates.

As of March 31, 2025, the loan book of REC stands at ₹5.66 trillion (~$65.91 billion) and has a net worth of ₹776.38 billion (~$9.04 billion).

In the fourth quarter of FY 2025, REC’s loan disbursements amounted to ₹455.38 billion (~$5.3 billion), a 16% year-over-year (YoY) increase. The distribution sector received 51% of the disbursements, followed by renewables (19%) and conventional generation (16%). Renewable energy loan disbursements totaled ₹85.75 billion (~$999.43 million), up 39% YoY.

In May, REC also raised ₹56.35 billion (~$656.2 million) through the private placement of bonds. The offering included bonds of ₹30 billion (~$349.35 million) for two years and 8 months at a coupon rate of 6.52%, and bonds of ₹26.35 billion (~$306.84 million) for ten years and 11 months at a coupon rate of 6.81%.

In April 2025, REC raised ₹50 billion (~$586 million) by issuing  bonds. The offering included ₹30 billion (~$352 million) of five-year bonds at a coupon rate of 6.97% and ₹20 billion (~$234.6 million) of ten-year bonds at a coupon rate of 6.86%.

In September 2024, it also raised $500 million through five-year green bonds as part of its $10 billion Global Medium-Term Program. The funds would be used to finance eligible green projects.