REC Gets CBDT Nod To Issue Rs 5,000 Crore Zero Coupon Bonds – EQ
In Short : REC Limited has received approval from the Central Board of Direct Taxes (CBDT) to issue ₹5,000 crore zero coupon bonds with a tenure of 10.5 years, to be issued by March 31, 2027. These bonds, offered at a discount, provide tax benefits and attract long-term investors. This move supports REC’s efforts to diversify funding for India’s infrastructure growth.
In Detail : REC, a Maharatna Central Public Sector Enterprise and one of India’s leading non-banking financial companies (NBFCs) under the Ministry of Power, has secured approval from the Central Board of Direct Taxes (CBDT) to issue Zero Coupon Bonds (ZCBs) worth Rs 5,000 crore.
The clearance was granted via Notification No. 52/2025 dated 30th May 2025, by the Department of Revenue, Ministry of Finance. This allows REC to issue five lakh Zero Coupon Bonds with a maturity period of ten years and six months.
Zero Coupon Bonds, typically offered at a deep discount and redeemed at face value upon maturity, provide significant tax benefits under the Income-tax Act, 1961. These features make them an attractive option for long-term investors looking for efficient tax planning and capital appreciation.
REC’s earlier issue of CBDT-notified ZCBs in FY 2024–25 witnessed an overwhelming market response, with the Rs 5,000 crore offering being oversubscribed nearly sevenfold. The bonds were issued at a yield of 6.25 per cent, which was around 100 basis points lower than the prevailing market rates—setting a new benchmark in the Indian debt market.
This successful issuance enabled REC to diversify its funding sources while attracting a new investor base and maintaining cost-effective financing.
With this latest approval, REC continues to leverage innovative financial instruments to mobilise funds that support the development of India’s growing energy infrastructure.
