REC Gets CBDT Approval to Launch INR 5,000 Crore Zero Coupon Bond Issue

REC Ltd., a Maharatna Central Public Sector Enterprise under the Ministry of Power, has secured approval from the Central Board of Direct Taxes (CBDT) to issue Zero Coupon Bonds (ZCBs) worth INR 5,000 crore.

The Department of Revenue under the Ministry of Finance granted its approval on May 30, 2025, authorising REC to issue five lakh Zero Coupon Bonds (ZCBs) with a tenure of ten years and six months. Issued at a deep discount and redeemable at face value upon maturity, these bonds offer significant tax benefits under the Income-tax Act, 1961, making them particularly appealing to institutional investors.

REC’s previous ZCB issuance in FY 2024–25 saw tremendous market interest, with the INR 5,000 crore offer oversubscribed nearly seven times. That tranche was priced at a yield of 6.25 percent, nearly 100 basis points below the prevailing market rates, setting a precedent in India’s financial sector and helping REC expand its investor base while securing low-cost capital.

With the fresh approval in hand, REC is poised to tap into alternative fundraising tools to finance India’s expanding energy infrastructure. The move reflects the NBFC’s broader strategy to mobilise resources innovatively and support the country’s clean energy transition and power sector reforms.