State-run lending agency Power Finance Corp plans to raise up to Rs 4,590 crore through tax free bonds by March next year.

The proposed issue is part of its plan to garner Rs 5,000 crore by way of issuing tax free securities in the current fiscal (2012-13). Out of the total target, Rs 410 crore has already been raised.

The company, which is engaged in financing power generation and transmission projects, said that bonds would be issued in one or more tranches through non-convertible debentures (NCD) route, according to draft prospectus file with SEBI.

An NCD is a type of loan-linked security issued by a company that cannot be converted into stock and usually carries a higher interest rate than a convertible debenture.

The funds would be utilised towards lending purposes, debt servicing and working capital requirements.

PFC said Ministry of Finance has authorised it to raise the bonds aggregating to Rs 5,000 crore in fiscal 2013 out of it has raised an amount of Rs 410 crore on a private placement basis.

“Our company proposes to raise the balance amount of Rs 4,590 crore through this issue of the bonds in one or more tranches prior to March 31, 2013,” PFC said.

ICICI Securities Ltd, AK Capital Services Ltd, Enam Securities, Kotak Mahindra Capital Company Ltd and SBI Capital Markets Ltd are acting as lead managers to the issue.