PFC & REC Merger

Following the Union Budget announcement by Finance Minister Nirmala Sitharaman, the boards of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) have informed the stock exchanges that they have granted in-principle approval for a merger between the two entities.

In her Budget speech on February 1, the Finance Minister proposed the restructuring of power sector non-banking financial companies (NBFCs) with the objective of achieving scale, improving operational efficiency, and strengthening financial capacity to support India’s power sector.

PFC is currently the promoter and holding company of REC. It had acquired a 52.63% stake in REC’s paid-up share capital in March 2019, thereby bringing REC under government control through PFC.