Power Finance Corporation (PFC) NCD 2026: Investors seeking stable, government-backed fixed income have a major opportunity this year. Power Finance Corporation (PFC), a Maharatna PSU, has launched its Tranche I NCD (Non-Convertible Debenture) issue for 2026, aiming to raise up to ₹5,000 Crore.
With bank FD rates fluctuating, the PFC NCD 2026 offers a compelling alternative for retail investors and HNIs. In this guide, we break down the interest rates, safety ratings, and whether you should invest.
An NCD (Non-Convertible Debenture) is a fixed-income financial instrument used by companies to raise long-term capital from the public.
In simple terms, when you buy an NCD, you are lending money to a company. In exchange, the company promises to pay you a fixed rate of interest (called a coupon) for a specific period and return your principal amount when the tenure ends.
The term “Non-Convertible” is crucial: it means these debentures cannot be converted into shares or equity of the company at a later date. You remain a creditor to the company, not an owner.
PFC NCD 2026: Key Issue Details
The PFC NCD Tranche I is a secured issue, meaning it is backed by the company’s assets, providing an extra layer of security for your capital.
| Feature | Details |
| Issue Opens | 2026 |
| Issue Closes | 2026 |
| Issue Size | ₹500 Cr (Base) + ₹4,500 Cr (Green Shoe) |
| Credit Rating | AAA (Stable) by CRISIL, CARE, and ICRA |
| Face Value | ₹1,000 per NCD |
| Minimum Investment | ₹10,000 (10 NCDs) |
| Listing | NSE (National Stock Exchange) |
PFC NCD Interest Rates 2026 (Category IV: Retail)
PFC offers multiple tenors ranging from 5 to 15 years. The interest is paid annually, with a cumulative option for long-term wealth compounding.
| Tenor | Interest Frequency | Coupon Rate (p.a.) | Effective Yield |
| 5 Years | Annual | 7.00% | 7.00% |
| 10 Years | Annual | 7.20% | 7.19% |
| 15 Years | Annual | 7.30% | 7.29% |
| 15 Years | Cumulative | N/A | 7.30% |
Pro Tip: The Zero Coupon NCD (approx. 10 years) is also available with an implied yield of 6.95%. This is excellent for investors who want to avoid annual TDS on interest, as the gains are treated as capital gains upon maturity.
Is PFC NCD Safe? (Credit Rating & Analysis)
Safety is the biggest concern for debt investors. PFC is a Maharatna PSU under the Ministry of Power, making it strategically vital to India’s infrastructure.
- Triple-AAA Ratings: Rated AAA/Stable by CRISIL, CARE, and ICRA. This is the highest possible credit rating in India, indicating the lowest risk of default.
- Asset Backing: As a Secured NCD, these bonds are backed by a charge on PFC’s receivables.
- Financial Health: As of late 2025, PFC maintains a healthy Capital Adequacy Ratio (above 25%) and robust Profit After Tax (PAT), reflecting a strong balance sheet.
Tax Implications You Must Know
Before investing, understand how your returns will be taxed:
- Interest Income: Taxed as per your Income Tax Slab.
- TDS: No TDS is deducted if the NCDs are held in Demat form on a recognized exchange.
- Capital Gains: If you sell the NCD on the exchange after 1 year, you may be eligible for Long-Term Capital Gains (LTCG) tax benefits.
How to Invest in PFC NCD 2026
You can apply for the PFC NCD through your existing stockbroker or dedicated bond platforms.
- ASBA/UPI: The easiest way is via your bank’s Net Banking (ASBA) or mobile apps like Google Pay/PhonePe (via UPI).
- Demat Account: Ensure you have a valid Demat account.
- Application: Search for “PFC NCD IPO” in your broker’s IPO section (Zerodha, Upstox, ICICI Direct, etc.).
- Allotment: Allotment is generally on a “First Come, First Serve” basis. If the issue oversubscribes early, it may close before January 30th.
Verdict: Should You Invest?
The Good:
- Highest safety (AAA PSU).
- Higher returns than most 5-15 year SBI or HDFC Bank FDs.
- High liquidity (listed on NSE).
The Risks:
- Concentration risk (PFC only lends to the power sector).
- Interest rate risk (if market rates rise significantly, bond prices may fall).
Final Word: For conservative investors, retirees, or those looking to diversify away from equity, the PFC NCD 2026 is a “Best-in-Class” debt instrument for long-term stability.
Disclaimer : Above Guidance only for information and Knowledge purpose. Contact your financial advisor for Investment.
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