REC to hold board meet on June 28 for PFC merger approval; PFC shares gain 22% in 6 months, REC up 2%

REC merger with Power Finance Corporation (PFC) has become a key development for market participants, with investors closely watching as the board prepares to meet to make a final call on the consolidation.

In a regulatory filing this week, REC said its board of directors will meet on Sunday, June 28, 2026, to consider and approve the scheme of merger.

Earlier this month, REC had received presidential approval for its proposed merger into PFC. In a regulatory filing, the company had stated that the Ministry of Power, vide its letter dated June 10, 2026, has “conveyed the approval of the Competent Authority in respect of the aforesaid proposal."

Earlier, on February 9, PFC’s board had given its in-principle approval for the merger of the non-banking finance company REC with itself, following the announcement made regarding the same by the Finance Minister at the 2026-27 Budget.

Post-merger, PFC will continue to remain a 'government company.'

The merger was initially announced during the 2026-27 budget, where the Finance Minister Nirmala Sitharaman, had said, "The vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption. In order to achieve scale and improve efficiency in the public sector NBFCs, as a first step, it is proposed to restructure the Power Finance Corporation and Rural Electrification Corporation.”

Previously, pursuant to 'In Principle' approval of the Cabinet Committee on Economic Affairs (CCEA), PFC had acquired 52.63% of the government's holding in REC Ltd for ₹14,500 crore in March 2019.

Accordingly, REC has been operating as a subsidiary company of state-owned PFC.

PFC raises $300 million via dollar bonds

This week, state-owned power sector finance company PFC raised $300 million via issuance of USD-denominated bonds.

Power Finance Corporation had said it has become the first central public sector undertaking (CPSU) and the first in the NBFC space to successfully tap the international bond market following the announcement of the special swap facility by the Reserve Bank of India (RBI) in its latest monetary policy statement.

The $300 million senior unsecured USD-denominated bonds with a tenor of 5 years are "priced at 105 basis points over the benchmark five-year US Treasury for a fixed coupon of 5.32% per annum," PFC said.

The issue saw a strong investor demand, attracting active and wider participation from investors across European and Asian markets, the company stated.

Core synergy would be dominant within

In terms of loan book size, after the merger, PFC would become comparable to some big banks with a combined loan book of ₹11.5 lakh crore ($125 billion). The mix between the two companies is now largely similar, and there is a large overlap in customer bases.

Post-merger conventional generation would still be 29%, 40% distribution and transmission, and 14% renewables. This should lead to better margins and RoA, eliminating competition for the same set of customers.

Additionally, given the government's focus on building scale through mergers, there could be increased growth momentum across renewables and infra funding.

PFC-REC share price trend

On Thursday, Power Finance Corporation’s shares closed at ₹432.65 apiece on the National Stock Exchange, falling 1.02%, while REC shares ended 0.27% up at ₹364.65 apiece.

Shares of PFC have outperformed REC so far this year, rising 19%, while REC saw a marginal decline of around 1%. Over the past six months, PFC has gained 22%, compared with a 2% rise in REC shares.

As of June 24, 2026, REC’s market capitalisation stood at ₹95,954.68 crore, while PFC has a higher valuation of ₹1.43 lakh crore, according to NSE data.