Note: The face value of this series is ₹1,00,000, offered at a discount of ₹49,220, with an issue price of ₹50,780; hence, the face value is considered as ₹50,780. An investment of ₹50,780 will become ₹1,00,000 at maturity after 121 months (10 years and 1 month). Power Finance Corporation Limited is a public financial institution and a Maharatna central public sector enterprise that provides financing services to power sector entities in India. It works with government agencies, state governments, power utilities, intermediaries, and private sector clients on financing power generation, transmission, and distribution projects. Its financial products include long-term project finance, rupee term loans, short-term loans, equipment lease and transitional finance, buyer’s credit lines, debt underwriting, debt refinance, letters of comfort, and credit enhancement guarantees. Through its subsidiary PFC Consulting Ltd (PFCCL), it also provides fee-based technical advisory and consultancy services for power projects. The company has expanded its lending to sectors linked to the power value chain, including renewable energy, e-mobility, energy storage, fuel sources, and related infrastructure, as well as select infrastructure and logistics projects. Power Finance Corporation operates as a listed non-deposit-taking systemically important NBFC-IFC with international lending through its IFSC subsidiaries. Use of Proceeds: The proceeds from the current issue of NCDs are proposed to be used for the following purposes: Onward lending, financing/refinancing the principal and interest on the existing borrowings — at least 75 percent of the amount proposed to be financed from net proceeds. General corporate purposes — a maximum of up to 25 percent.;

Pros and Cons

Pros

Cons

Power Finance Corporation claims to provide a comprehensive financial assistance platform focused on the Indian power sector, covering projects from conceptualisation to post-commissioning across generation (conventional and renewable), transmission, distribution, renovation, and modernisation. It offers fund-based assistance such as long-term project finance, short-term loans, buyers’ lines of credit, bridge loans, corporate loans, and debt refinancing, along with non-fund-based support, including default payment guarantees and letters of comfort. Through its wholly owned subsidiary PFCCL and its subsidiary REC, which is also registered as a non-banking finance company-infrastructure finance company (NBFC-IFC) with the RBI, the company provides fee-based technical advisory and consultancy services to benefit from synergies that enhance its product portfolio, de-risk its revenue base, achieve economies of scale, and support deployment of investable funds.

Power Finance Corporation claims to play a strategic role in the Government of India's initiatives for the power sector, including acting as a nodal agency for schemes such as RDSS (including the erstwhile IPDS and R-APDRP), UMPP, and as a bid process coordinator for the ITP scheme. It was mandated, along with REC, to disburse Rs 90,000 crore under the DISCOM Liquidity Package, of which it has disbursed Rs 52,886.70 crore as of September 30, 2025, and has also disbursed Rs 45,873.62 crore under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, with loans under both schemes backed by unconditional and irrevocable state government guarantees. The company claims that its long-term involvement in policy implementation and reform has helped it build strong working relationships with central and state governments, regulators, utilities, private developers, and intermediaries, and strengthen its project risk assessment and advisory capabilities.

Power Finance Corporation is registered with the RBI as a non-deposit-taking systemically important NBFC and is classified as an Infrastructure Finance Company (IFC), which it claims provides greater operational flexibility in fund-raising and lending. The company believes that its IFC status allows it to take higher exposure to individual entities, corporations, and groups than non-IFC NBFCs, which it claims is a competitive advantage for financing large and long-gestation power sector projects.

Power Finance Corporation’s primary funding sources include equity capital, internal resources, and domestic and foreign currency borrowings, and it holds high domestic credit ratings such as AAA/Stable and A1+ from Crisil, ICRA, and CARE across its long-term, short-term, and interchangeable borrowing programmes, within specified limits. Internationally, it is rated Baa3 (Stable) by Moody’s and BBB- (Stable) by Fitch, and the company claims that these ratings enable access to various cost-competitive funding options, including bonds, term loans, commercial paper (CP), and external commercial borrowings (ECB) of up to $750 million each fiscal year under the automatic route, subject to conditions.

Power Finance Corporation claims to have comprehensive credit appraisal policies and risk management processes tailored to the Indian power sector. It states that it follows a systematic institutional and project appraisal framework to assess and mitigate project and credit risk, with internal review mechanisms aimed at reducing defaults and supporting profitability. As of September 30, 2025, and FY25, the company reports that 73.52 percent and 74.35 percent of its outstanding loans to Central and State sector borrowers, respectively, are backed by escrow mechanisms, under which an escrow agent is required to make available defaulted amounts on demand.