REC board approves raising ₹1.55 lakh crore via bonds

New Delhi, June 4, 2025 — In a significant move to bolster financing for India’s infrastructure and power sectors, the Board of Rural Electrification Corporation Limited (REC Ltd) has approved raising up to ₹1.55 lakh crore in FY2025–26 through various bond instruments. The approval was granted during a board meeting held on June 3.

This strategic fundraising initiative underlines the company’s pivotal role in driving the country’s energy transformation and infrastructure development, especially amid the government’s thrust on clean energy, rural electrification, and modern infrastructure.

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A Broad-Based Capital Raising Framework

According to REC’s regulatory filing, the ₹1.55 lakh crore will be mobilized through a combination of rupee-denominated and foreign currency bonds. These may include:

• Non-convertible debentures (NCDs)

• Green bonds

• Masala bonds

• Euro bonds and other structured instruments

The fundraising will be carried out in tranches, subject to market conditions and regulatory approvals. The instruments will be listed on both Indian and international stock exchanges, depending on the type and currency of issuance.

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Strengthening REC’s Lending Capacity

With this capital infusion plan, REC aims to strengthen its lending book focused on long-term infrastructure financing, particularly in the energy and renewable sectors.

Speaking on the development, Vivek Kumar Dewangan, Chairman and Managing Director of REC Ltd, said:

“This fundraising aligns with our strategic roadmap to support India’s clean energy targets and ensure last-mile electrification. Our robust credit profile gives us flexibility to tap both domestic and global markets efficiently.”

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Market Context: Rising Demand for Infrastructure Credit

The move comes against the backdrop of increasing demand for long-tenure capital in India’s infrastructure landscape. The government has earmarked nearly ₹11 lakh crore for capital expenditure in the FY26 budget, with a large share directed toward energy, logistics, and rural development.

REC, which was accorded “Maharatna” status in 2022, plays a crucial role in channeling institutional finance toward government-backed and private sector projects. As of FY25-end, REC had a loan book exceeding ₹4.75 lakh crore and reported healthy net profits and asset quality.

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Analyst Insights: Positive Sentiment Around REC’s Strategy

Market analysts have welcomed the move, citing REC’s disciplined approach and well-established borrowing capacity.

Ravi Subramanian, fixed-income strategist at Axis Securities, commented:

“REC has consistently demonstrated strong financial prudence. The approved bond issuance allows them to maintain a healthy asset-liability profile while continuing to support critical national infrastructure.”

Jyoti Mishra, senior research analyst at Prabhudas Lilladher, added:

“REC’s access to international debt markets through green and masala bonds allows diversification and reduces funding cost. This fundraising is likely to support the next wave of power sector reforms and renewable investments.”

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Bond Market Response and Credit Ratings

REC enjoys high credit ratings, with CRISIL and ICRA assigning “AAA” ratings to its domestic borrowings. Internationally, Fitch Ratings and Moody’s have consistently maintained investment-grade ratings for REC's foreign currency bonds, indicating low default risk and stable outlook.

Bond investors are likely to view this announcement positively, especially with expectations of stable interest rates in FY26 and strong demand for infrastructure-linked debt papers.

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Investor Outlook: Stability, Returns, and Growth Synergy

For retail and institutional investors, REC’s bonds have long been considered a safe investment avenue with attractive yields. The company has a track record of timely repayments and operational efficiency, which enhances investor confidence.

Market experts suggest that investors can expect:

• Stable returns from fixed-income REC instruments

• Increased secondary market activity in listed NCDs

• Opportunities in ESG-aligned portfolios via green bonds

• Diversification benefits from masala and euro bonds

With REC’s continued focus on energy transition, digital infrastructure, and smart grid projects, the capital raised will likely have long-term multiplier effects on the Indian economy.

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Looking Ahead: Paving the Way for Energy & Infrastructure Growth

REC’s ₹1.55 lakh crore bond issuance plan not only underscores its leadership in infrastructure finance but also reflects the broader macroeconomic vision for self-reliant, sustainable growth.

By leveraging its strong balance sheet and institutional backing, REC is poised to play a central role in financing India’s ambitions — from green hydrogen to rural electrification and urban metro networks.

As India progresses toward becoming a $5 trillion economy, institutions like REC are expected to be instrumental in bridging the infrastructure financing gap and catalyzing inclusive development.

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The REC board’s approval for a ₹1.55 lakh crore bond fundraising plan marks a major financial and strategic milestone. By combining domestic and international instruments and targeting both traditional and ESG-focused investors, REC is charting a future-ready path that aligns with India’s economic and energy transition goals.

Investors, policymakers, and industry stakeholders will closely watch the execution of this plan in the months ahead, as REC continues to power India’s infrastructure growth story.