State-owned lenders Power Finance Corporation (PFC) and REC Ltd have approved their long-awaited merger, paving the way for the creation of India’s largest power sector financing company. The combined entity will have a loan book exceeding ₹11 lakh crore, strengthening its ability to fund power and infrastructure projects across the country.
The merger, approved by the boards of both companies, comes after the Government of India’s approval earlier this month. It is aimed at improving scale, operational efficiency, and financial strength in the public sector NBFC space. Investors will closely watch both stocks as the merger process moves toward regulatory and shareholder approvals.
Merger at a Glance
Particulars
Details
Companies Involved
Power Finance Corporation (PFC) and REC Ltd
Merger Structure
REC will be merged into PFC
Combined Loan Book
Over ₹11 lakh crore
Merger Status
Approved by both company boards
Legal Framework
Sections 230-232 of the Companies Act, 2013
Government Ownership
Government of India will retain majority control
Share Exchange Ratio
Particulars
Details
Exchange Ratio
88 PFC shares for every 100 REC shares
Basis
Joint valuation by independent valuers
Record Date
To be announced later
Key Conditions
Condition
Details
Government Status
Merged company must remain a government company
Government Holding
Majority voting rights to remain with the Government of India
Required Approvals
Shareholders, creditors, regulators, and competent authorities
