REC Ltd gets CBDT nod to issue Rs 5,000 crore zero coupon bonds

New Delhi: REC Limited, a Maharatna Central Public Sector Enterprise and a premier non-banking financial company (NBFC) 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.

PSU Watch is now on Whatsapp Channels. Click here to join

The approval, granted via CBDT Notification No. 52/2025 dated May 30, 2025, allows REC to issue five lakh Zero Coupon Bonds with a tenure of ten years and six months. These bonds will be issued at a deep discount and redeemed at face value on maturity, offering notable tax advantages to investors under the Income-tax Act, 1961.

The move comes on the back of REC’s successful ZCB issuance in FY 2024–25, which was oversubscribed nearly seven times. That offering, which also totalled Rs 5,000 crore, was priced at a yield of 6.25 percent —around 100 basis points below prevailing market rates—establishing a new benchmark in the market.

The previous success enabled REC to diversify its funding base and attract a new class of investors, reinforcing its reputation as a leader in innovative financial instruments.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)