PFC-REC Merger Approved by President of India; Shares Slip as Government Pushes PSU Consolidation Plan

Shares of REC Ltd and Power Finance Corporation (PFC) came into focus on Thursday, June 11, after the President of India approved the proposed merger of REC into PFC, marking a major consolidation move in the public sector financial space. Following the development, both stocks saw investor attention as markets reacted to the regulatory update.

PFC-REC Merger Updates

In a regulatory filing dated Wednesday, REC confirmed that the Ministry of Power, through its letter dated June 10, 2026, conveyed approval from the competent authority regarding the merger proposal. The company stated that this was in continuation of its earlier disclosure dated May 16, 2026, when its Board of Directors had already approved the proposal, subject to final approval from the President of India.

The filing also referenced compliance under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It noted that the merger decision follows earlier approvals and discussions at the government level regarding restructuring of public sector NBFCs to improve scale and efficiency.

PFC Share Price Today

PFC also remained under pressure in early trade following the merger approval involving REC Ltd. The stock was trading at Rs 424.05, down Rs 7.25 or 1.68%, at 9:24 AM IST.

REC Share Price Today

REC Ltd shares were in focus during Thursday's trading session on June 11 after the government approved its merger with Power Finance Corporation (PFC). The stock was trading at Rs 343.90, down Rs 4.90 or 1.40%, at 9:25 AM IST.

Earlier, on February 9, PFC's board had given in-principle approval for the merger of REC with itself. This move came after announcements made in the Union Budget 2026-27, where Finance Minister Nirmala Sitharaman had outlined a broader plan to strengthen public sector NBFCs through consolidation and improved operational efficiency.

The Finance Minister had stated that "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."

The merger has historical backing as well. In March 2019, PFC had acquired 52.63% of the government's stake in REC Ltd for Rs 14,500 crore, making REC its subsidiary. Since then, REC has operated under the control of PFC.

Once the merger becomes effective under applicable laws, all assets and liabilities of REC will be transferred to PFC, after which REC will be dissolved in accordance with Sections 230-232 of the Companies Act, 2013. Despite the merger, PFC will continue to remain a government-owned company.