PFC Board Approves REC Merger to Enhance NBFC Scale and Efficiency

State-owned power sector financier Power Finance Corporation (PFC) has approved an in-principle merger with its subsidiary REC Ltd, aligning with the government’s broader restructuring plan for public-sector NBFCs to improve scale, efficiency and credit delivery. 

Board Clears In-Principle Merger Move 

The company said its board has taken note of the Union Budget announcement on restructuring public NBFCs and approved a merger of PFC and REC at the preliminary stage. The combined entity will continue to remain a government company under the Companies Act and other applicable regulations. 

PFC had earlier acquired 52.63% of the government’s stake in REC in March 2019 for ₹14,500 crore after Cabinet approval, following which the two institutions have functioned as holding and subsidiary. 

In an exchange filing after the board meeting, the company said the detailed merger scheme will be shared once required approvals are obtained. 

Budget Push for Public NBFC Scale and Efficiency 

In the Union Budget speech on February 1, the Finance Minister outlined a roadmap for strengthening NBFCs to support Viksit Bharat goals, including higher credit flow and technology adoption.  

As part of that strategy, restructuring PFC and REC was identified as a first step toward building scale and operational efficiency among public-sector financiers. 

The merger is intended to create a larger and more efficient lending platform focused on the power and infrastructure ecosystem. 

PFC and REC Share Price Performances  

As of February 09, 2026, at 11:13 AM, PFC share price is trading at ₹461.60, a 0.62% decline from the previous closing price.  

Whereas REC share price is trading at ₹362.25, a 2.65% decline from the previous closing price. 

Conclusion 

The proposed PFC-REC merger marks a significant consolidation step in the public NBFC space, aimed at building a stronger financing institution to support large-scale power and renewable energy investments. 

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