REC Limited has received formal approval from the Central Board of Direct Taxes (CBDT), under the Ministry of Finance for the issuance of zero coupon bonds (ZCBs) amounting to Rs 50 billion. The approval allows REC to issue 500,000 ZCBs with a tenure of ten years and six months. These bonds will be offered at a deep discount and redeemed at face value upon maturity. They reportedly provide notable tax advantages to investors under the Income Tax Act, 1961.
The previous CBDT-notified issuance of similar bonds by REC in the financial year 2024–25 garnered a strong market response, with subscriptions nearly seven times the original Rs 50 billion offering. Those bonds were issued at a yield of 6.25 per cent, around 100 basis points lower than the prevailing market rates at the time. The performance of the earlier issuance has enabled REC to tap into a new segment of investors while diversifying its funding sources through competitive and tax-efficient instruments.
In May 2025, REC Limited raised Rs 56.35 billion through a private placement of bonds, issuing Rs 30 billion through 2-year 8-month bonds at a 6.52 per cent annual coupon, and Rs 26.35 billion through 10-year 11-month bonds at 6.81 per cent.
