New Delhi: A clarification has been issued regarding certain media reports that stated “post-merger, PFC continues to remain as a Government company” in connection with the proposed merger of Power Finance Corporation Limited (PFC) and REC Limited. Authorities have clarified that the statement was subsequently corrected in a revised stock market filing submitted by PFC.
As per the revised filing, the correct position is that “post-merger, the merged entity continues to remain as a Government company.”
REC and PFC Boards Grant In-Principle Approval for Merger
The Boards of Directors of REC Limited and Power Finance Corporation Limited have accorded in-principle approval to proceed with the proposed merger of the two public sector non-banking financial companies (NBFCs). The move aligns with the announcement made in the Union Budget 2026–27, which proposed consolidation to enhance scale, operational efficiency, and lending capacity in the public sector financial ecosystem.
Union Budget Vision Under Viksit Bharat
In her Budget speech, the Hon’ble Finance Minister outlined a broader vision for strengthening NBFCs as part of the Viksit Bharat framework. The speech highlighted ambitious targets for credit expansion and technology adoption. As a first step toward achieving greater scale and efficiency in public sector NBFCs, the restructuring of PFC and REC was proposed.
Merger Process and Regulatory Compliance
On 6 February 2026, the Boards of both PFC and REC took note that the proposed restructuring would involve the formulation of a detailed merger scheme, which will be prepared in compliance with applicable laws and regulatory requirements.
Once finalised, the merger scheme will be submitted to the relevant statutory and regulatory authorities for approvals. The companies have indicated that further details regarding the merger structure, integration roadmap, and implementation timelines will be disclosed after the approval process is completed.
Government Company Status Retained Post-Merger
Both REC and PFC, in their respective filings — including PFC’s revised stock exchange disclosure — have explicitly stated that the merged entity will continue to be classified as a “Government Company” under the provisions of the Companies Act, 2013. This clarification is significant, as it addresses concerns raised by earlier media interpretations and reinforces the government’s continuing ownership and control.
PFC’s Majority Stake in REC
Power Finance Corporation currently holds a 52.63% majority stake in REC Limited, following its acquisition of the Government of India’s shareholding in REC in 2019. This existing ownership structure forms the foundation for the proposed merger and consolidation of the two institutions.
Request to Media Outlets
In light of the corrected disclosure, media outlets have been requested to publish the clarification to ensure accurate reporting of facts related to the REC–PFC merger and the status of the merged entity.
About Power Finance Corporation (PFC)
Power Finance Corporation Limited (PFC) is a leading financial institution in India specializing in funding and supporting the power sector. Headquartered in New Delhi, PFC plays a crucial role in financing power generation, transmission, and renewable energy projects across the country. It is a Schedule A public sector undertaking under the Ministry of Power.
About REC Limited
REC Limited is a Maharatna Central Public Sector Enterprise under the Ministry of Power, Government of India. The company plays a pivotal role in financing and promoting power sector infrastructure, including generation, transmission, distribution, and renewable energy projects, supporting India’s long-term energy security and sustainable development goals.
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