PFC and REC boards approve merger proposal for presidential clearance
REC Limited and Power Finance Corporation Limited (PFC) have announced that their respective Boards of Directors have approved the proposal for the merger of REC into PFC, subject to the approval of the Hon’ble President of India in accordance with their Articles of Association.
In separate exchange filings, both state-owned non-banking financial companies (NBFCs) said their Boards have reserved the merger proposal for presidential approval and authorised their Chairmen and Managing Directors (CMDs) to submit the necessary application.
The proposed merger will be undertaken under Sections 230 to 232 of the Companies Act, 2013. According to the filings, the share exchange ratio will be determined by appointed valuers.
The companies stated that the merged entity will continue to retain its status as a Government Company, including through the issuance of securities or capital infusion by the Central Government where required. Upon the merger becoming effective, all assets and liabilities of REC will be transferred to PFC, following which REC will stand dissolved.
PFC and REC had earlier informed stock exchanges that they were proceeding with the merger after the PFC Board granted in-principle approval on February 6, 2026. In a joint filing dated February 12, 2026, the companies outlined the rationale and expected outcomes of the consolidation. According to the filing, the merger is intended to support the large capital requirements of India’s power sector as the country progresses toward its Viksit Bharat 2047 objectives. Based on consolidated financial metrics, the combined entity is expected to become the country’s largest power sector financier.
