"Tax Free bonds of NTPC Ltd gets stupendous response... The issue got an overwhelming response and was oversubscribed by 7.25 times across the different tenures," the company said in a statement.

The company further said that it targeted raising Rs 300 through the bonds but the bids were received for Rs 2,175 crore for placing the bonds on private placement route.

"NTPC has decided to retain subscription for 10 years of maturity at the coupon rate of 7.15 per cent per annum," the company said.

Government had in July allowed seven state-owned entities, including NTPC, NHAI and IRFC, to raise Rs 40,000 crore in the current fiscal through tax-free bonds.

The National Highways Authority of India has been permitted to raise Rs 24,000 crore and Indian Railways Finance Corporation Rs 6,000 crore, said a notification issued by the Central Board of Direct Taxes (CBDT).

Housing and Urban Development Corporation (Hudco) was allowed to raise Rs 5,000 crore and Indian Renewable Energy Development Agency (Ireda), Rs 2,000 crore. NTPC, Power Finance Corporation and Rural Electrification Corporation can issue tax-free bonds of Rs 1,000 crore each.

Retail investors, which include HUFs and NRIs investing on repatriation basis, can invest up to Rs 10 lakh in such bonds. Those investing higher amount would be classified as HNIs.

The bonds will have a tenure of 10, 15 or 20 years and the interest rates is to be decided with reference to the rates of Government Securities.