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PFC Takes Controlling Stake in REC, Clears Initial Approval for Merger

Power Finance Corporation (PFC) has acquired 52.63% of the Government of India’s equity holding in REC Limited, resulting in REC becoming a subsidiary of PFC. Following the transaction, the two state-owned financial institutions are now operating under a holding–subsidiary framework.

In a regulatory disclosure, PFC said its Board of Directors also reviewed the Union Budget 2026–27 announcement made on February 1, which outlined the government’s plan to reorganize public sector non-banking financial companies (NBFCs) to improve scale, operational efficiency, and the flow of credit to priority sectors. The restructuring of PFC and REC was identified as a key component of this broader strategy.

Aligned with the budget proposal, the PFC Board has granted in-principle approval for the merger of the two entities. The company clarified that the merged organization would continue to be classified as a “Government Company” in accordance with the Companies Act, 2013, and other applicable regulations.

The proposed consolidation is intended to enhance operational synergies, strengthen financial capacity, and support India’s long-term power sector and infrastructure financing goals under the Viksit Bharat vision.