The Board of Directors of REC Limited has approved a merger scheme with Power Finance Corporation (PFC). This consolidation will create one of India's largest public sector financial institutions.
The combined entity will manage a loan book exceeding ₹11 lakh crore (approximately ₹11 trillion). The merger aims to streamline operations and eliminate competition between the two entities for the same projects. This strategic move also seeks to reduce the cost of funds for financing India's energy transition.
REC will act as the transferor company, merging into PFC as the transferee company. REC shareholders will receive 88 equity shares of PFC for every 100 equity shares they currently hold. This share exchange ratio provides a premium to REC shareholders based on recent market prices.
The merger remains subject to final approvals from shareholders, creditors, and regulatory authorities.