Power Finance Corporation Limited (PFC) has come out with its Tranche I NCD issue in January 2026, offering investors an opportunity to earn relatively stable returns from a Government-backed power sector financier. With interest rates going through cycles and fixed deposit returns remaining moderate, high-rated public issue NCDs continue to attract conservative and income-seeking investors. In this article, we review the Power Finance NCD Jan-2026 issue in detail, covering company background, issue details, interest rates, credit ratings, financials, pros, cons, application process, FAQs, and our final investment view.
About Power Finance Corporation Limited
Incorporated in 1986, Power Finance Corporation Limited is one of India’s largest and most important financial institutions dedicated to the power sector. The company primarily supports generation, transmission, distribution, and renewable energy projects across India. PFC works closely with Government of India agencies, state governments, power utilities, and private sector players to strengthen the country’s power infrastructure.
PFC is registered with the Reserve Bank of India as a non-deposit taking, systemically important NBFC. It was granted Navratna status by the Government of India in 2007, reflecting its strategic importance and financial strength. Over the years, PFC has evolved into a key lender for conventional and renewable energy projects and also provides advisory and consultancy services through its wholly owned subsidiary, PFC Consulting Limited.
Power Finance NCD Jan-2026 Issue Details
The Power Finance Corporation Limited NCD issue (Tranche I, January 2026) is a public issue of secured, redeemable, non-convertible debentures. The base issue size is ₹500 crore, with a green shoe option to retain oversubscription up to ₹4,500 crore. The NCDs are priced at a face value of ₹1,000 per debenture.
The issue opens on January 16, 2026, and closes on January 30, 2026. Allotment will be done on a first-come, first-served basis, subject to category-wise limits. The NCDs will be listed on NSE, providing liquidity to investors who may wish to exit before maturity.
Power Finance NCD Interest Rates and Tenure Options
PFC is offering multiple series under this NCD issue, catering to investors with different income and tenure preferences. The tenures range from 5 years to 15 years. Annual interest options offer coupon rates up to 7.05% per annum, while a cumulative option is available for long-term investors who prefer maturity value growth.
The effective annual yield goes up to around 7.05%, depending on the chosen series. Given the AAA credit rating and secured nature of these NCDs, the interest rates are competitive when compared with bank fixed deposits of similar tenure.
Power Finance NCD Jan-2026 – Interest Rates
| Series | Tenure | Interest Payment | Coupon Rate (% p.a.) | Effective Yield (% p.a.) | Maturity Amount (₹) |
|---|---|---|---|---|---|
| Series I | 5 Years | Annual | 6.85% | 6.85% | 1,000 |
| Series II | 10 Years | Annual | 7.00% | 6.99% | 1,000 |
| Series III | 121 Months | On Maturity | NA | 6.80% | 1,00,000* |
| Series IV | 15 Years | Annual | 7.05% | 7.04% | 1,000 |
| Series V | 15 Years | Cumulative | NA | 7.05% | 2,780.50 |
(For Series III NCDs, the minimum application amount shall be ₹. 51,502.00 for Category I and II; ₹. 51,263.00 for Category III and ₹. 50,780.00 for Category IV Investors)
Credit Ratings of Power Finance NCD
The Power Finance Corporation NCDs have received the highest possible credit ratings from leading agencies. CARE Ratings, CRISIL, and ICRA have all assigned AAA rating with a stable outlook. This indicates the highest degree of safety and the lowest credit risk.
Such consistent AAA ratings across agencies reflect PFC’s strong government backing, stable cash flows, and critical role in India’s power sector financing.
Objects of the Issue
The proceeds from the Power Finance NCD Jan-2026 issue will be used primarily for onward lending and refinancing of existing borrowings. A portion of the funds may also be utilized for servicing existing debt obligations, including interest and principal repayments. The remaining amount will be used for general corporate purposes.
These objectives align with PFC’s core business of financing power sector projects and managing its borrowing costs efficiently.
Company Financials
PFC has demonstrated steady growth in its balance sheet and profitability over the years. As of September 30, 2025, the company reported total assets of over ₹12.2 lakh crore. Total income and profit after tax have remained strong, supported by stable interest income from long-term power sector loans.
For FY2025, PFC reported profit after tax exceeding ₹30,000 crore, reflecting healthy margins and efficient cost management. The company’s scale and government ownership provide additional comfort to long-term investors.
Why You May Consider Investing in Power Finance NCD
One of the biggest positives of this NCD issue is its AAA credit rating from multiple agencies. The NCDs are secured, offering an additional layer of safety. PFC enjoys strong government backing and plays a strategic role in India’s power sector.
The interest rates are attractive for conservative investors seeking predictable income. Listing on NSE provides liquidity, and multiple tenure options allow investors to match their investment horizon with personal goals.
Why You May Avoid Power Finance NCD
Despite strong credit quality, the returns are not inflation-beating over the long term. Investors in higher tax brackets may find post-tax returns less attractive compared to certain tax-efficient instruments.
Also, long-tenure NCDs carry interest rate risk. If market interest rates rise in the future, investors locked into lower coupon rates may face opportunity cost. Liquidity in the secondary market, while available, may not always be at favorable prices.
How to Apply for Power Finance NCD Jan-2026
Retail investors can apply for this NCD issue through supported online platforms such as NSE goBID, select broker platforms, or via UPI-based ASBA applications. Investors need a demat account to hold the NCDs.
Applications can also be made through platforms like GoldenPi and IndiaBonds by completing the online application process and approving the UPI mandate. Allotment will be on a first-come, first-served basis.
FAQs on Power Finance NCD Jan-2026
Is Power Finance NCD safe to invest?
The NCDs are rated AAA by multiple agencies and are secured, indicating high safety.
What is the minimum investment amount?
The minimum investment is 10 NCDs, amounting to ₹10,000.
What is the maximum interest rate offered?
The highest effective yield is around 7.05% per annum.
Can I sell the NCD before maturity?
Yes, the NCDs will be listed on NSE and can be sold, subject to market liquidity.
Is interest taxable?
Yes, interest income from NCDs is taxable as per the investor’s income tax slab.
How is allotment done?
Allotment is on a first-come, first-served basis within investor categories.
Should You Invest or Avoid?
Power Finance NCD Jan-2026 is suitable for conservative investors looking for stable income from a highly rated, government-backed issuer. The AAA rating, secured structure, and predictable cash flows make it a relatively low-risk debt investment.
However, investors seeking high returns or inflation-beating growth may find the returns modest. Overall, for income-focused portfolios and capital preservation, this NCD issue can be considered as part of a diversified fixed-income allocation.
