The Board of Directors of state-owned Power Finance Corporation (PFC) on Sunday approved its merger with REC Ltd, with REC shareholders set to receive 88 fully paid-up equity shares of PFC for every 100 equity shares of REC. The proposed amalgamation will create one of India's largest power sector financiers, with a combined loan book of more than Rs 11 lakh crore, strengthening scale, operational efficiency and lending capacity.
According to an exchange filing, the PFC board, at its meeting held on June 28, 2026, approved the merger scheme under Sections 230 to 232 of the Companies Act, 2013, based on the recommendations of the Audit Committee and the Committee of Independent Directors.
The merger will be implemented on a going-concern basis, under which REC will be dissolved without being wound up. The share exchange ratio will apply to eligible REC shareholders as of the record date, which will be announced later.
The transaction remains subject to statutory and regulatory approvals, including those from the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), and other relevant government authorities.
PFC and REC said the merger is conditional on the combined entity continuing to qualify as a Government Company under the Companies Act, 2013. The Government of India will continue to retain majority voting rights and overall control following the merger.
Further details on the integration roadmap and implementation timeline will be announced after all regulatory approvals are secured.
PFC currently owns 52.63% of REC, having acquired the Government of India's stake in the company in 2019. The merger follows Finance Minister Nirmala Sitharaman's announcement in the Union Budget earlier this year that the government would restructure PFC and REC to streamline operations and eliminate overlaps in power sector financing.
