The bonds, set at an ultra-low interest rate of 5% per annum, will mature in 10 years and be convertible into equity at Rs 51 per share. The proceeds are expected to help the company reduce debt and fuel future growth, particularly in its renewable energy ventures.

The announcement follows Reliance Power's recent progress towards becoming debt-free, with its subsidiary Rosa Power prepaying Rs 8.5 billion to Värde Partners in September. The move comes as the company seeks to shore up its finances amid increased competition and demand in the power sector.

In addition to the bond issue, the energy company’s board also approved an Employee Stock Option Scheme (ESOS) for all employees of the company and its subsidiaries, granting up to 22 crore equity shares. The ESOS aims to align employee compensation with company performance, according to the press release.

The FCCBs and ESOS are subject to shareholder and regulatory approvals, with the company targeting swift execution in a competitive power generation market. Reliance Power’s shares closed at Rs 53.65 per share, up 4.99 %, while the benchmark Sensex was lower by 2.10 % at 82,497.10 points.