India's state-run Power Finance Corp (PFC) plans to raise at least 10 billion rupees via tax-free bonds, two sources involved in the issue. The financial institution, engaged in power sector funding, will raise 10-year funds at 8.20 percent and 15-year at 8.30 percent, the sources said. The company has an option to retain oversubscription of upto 40.33 billion rupees. Half of the total issuance will be allotted to institutional investors, while a quarter will be issued to high net worth individuals and the remainder to retail investors, the sources said. Interest will be paid every year on Oct. 15, and on respective maturity, one of the sources said. India has allowed four firms to raise 300 billion rupees via tax-free bonds in the current financial year that began in April. National Highways Authority of India (NHAI) and Indian Railway Finance Corp (IRFC) can each raise 100 billion rupees,while Housing and Urban Development Corp. (HUDCO) and Power Finance Corp can each raise 50 billion rupees. The issue, which is rated AAA by Crisil and ICRA, will open on Friday and close on Jan. 16, the sources said. A.K. Capital Services, SBI Capital Markets and RR Investors Capital are the lead managers to the issue.