PFC Plans ₹5,000 Crore Fundraise via Non-Convertible Debentures to Strengthen Lending Capacity – EQ
In Short : State-owned Power Finance Corporation has announced plans to raise up to ₹5,000 crore through the issuance of non-convertible debentures. The proposed fundraising aims to enhance the company’s financial flexibility, support lending to the power and infrastructure sectors, and optimise its capital structure while meeting long-term funding requirements in a cost-effective manner.
In Detail : Power Finance Corporation has unveiled plans to raise up to ₹5,000 crore by issuing non-convertible debentures, reinforcing its strategy to secure long-term funds from the debt market. The move reflects the company’s focus on maintaining a strong liquidity position while supporting India’s expanding power and infrastructure financing needs.
The proposed NCD issuance is part of PFC’s broader capital-raising programme aimed at ensuring adequate resources for lending operations. By tapping the bond market, the company seeks to diversify its funding sources and reduce reliance on short-term borrowings, thereby improving balance sheet stability.
Non-convertible debentures are a preferred instrument for large financial institutions due to their predictable cost structure and long-term tenure. The planned issue is expected to attract strong interest from institutional investors, given PFC’s established track record, sovereign backing, and consistent performance.
The funds raised through this issuance will primarily be utilised to support ongoing and future lending to the power sector, including generation, transmission, and distribution projects. This is particularly relevant as India accelerates investments in renewable energy, grid modernisation, and energy transition initiatives.
PFC’s fundraising initiative also aligns with its objective of optimising borrowing costs. By timing market issuances strategically, the company aims to secure competitive interest rates, which can help protect margins and enhance profitability over the long term.
The move comes at a time when capital requirements in the power sector are increasing, driven by rising electricity demand, renewable energy expansion, and infrastructure upgrades. As a key financial intermediary, PFC plays a critical role in mobilising capital for these priority areas.
Beyond funding growth, the NCD issue is expected to strengthen PFC’s asset-liability management by extending the maturity profile of its borrowings. This supports greater financial resilience and reduces refinancing risks in a dynamic interest rate environment.
The planned issuance also signals confidence in the debt market’s appetite for high-quality issuers. PFC’s consistent access to capital markets underscores investor trust in its governance standards, financial discipline, and long-term business outlook.
Overall, the proposed ₹5,000 crore NCD issue represents a strategic step for Power Finance Corporation, enabling it to sustain lending momentum, support India’s power sector development, and reinforce its position as a cornerstone institution in the country’s energy financing ecosystem.
