PFC-REC Merger Latest Update: Centre Plans 51% Voting Rights Despite 36.96% Stake; PFC Share Price Today Falls

The Centre is preparing a structure to retain 51% voting rights in the proposed merged entity of Power Finance Corporation (PFC) and REC, even if its ordinary shareholding falls below the majority level, according to a Zee Business report citing sources. Under the proposed structure, the government's ordinary shareholding in the combined company could fall to around 36.96%, while special voting rights may help it retain majority control.

PFC-REC Merger Latest Update: Centre Plans 51% Voting Rights in Merged Entity

REC will be absorbed into PFC under the proposed merger, subject to the necessary approvals. The merger was announced in the Union Budget 2026, and the government has now prepared a broad blueprint covering the post-merger ownership and voting structure.

The government's focus is on maintaining majority voting control even if its ordinary equity holding declines after the merger. Sources cited by Zee Business said officials are examining superior high-voting shares along with preference shares to achieve this objective.

Under the proposed arrangement, one share could carry 10 voting rights. This would allow the government to have a majority say in important shareholder decisions, including board appointments and major corporate actions, despite holding less than 50% through ordinary shares.

The need for such a structure arises because, in a merger, the surviving company issues fresh shares to shareholders of the company being absorbed. This can reduce the existing shareholder's percentage ownership and voting power.

Superior Voting Rights Shares Under Consideration

The Centre is considering Superior Voting Rights (SVR) shares carrying 10 votes per share, according to the report. Around 7 crore SVR shares may be issued at a premium under the proposed structure. In addition, around 63 crore redeemable preference shares (RPS) with a face value of Rs 10 each may be issued.

Unlike ordinary equity, which generally follows the one-share-one-vote principle, SVR shares provide higher voting power to specific shares. The proposed structure is aimed at allowing the government to preserve control without maintaining more than half of the ordinary equity.

PFC-REC Merger Share Swap Ratio

Under the proposed merger arrangement, REC shareholders will receive 88 PFC shares for every 100 REC shares held on the record date. The record date has not yet been announced. The proposed transaction does not involve a cash payout, with the merger structured around the share-swap arrangement.

The boards of PFC and REC had cleared the merger scheme, including the share swap ratio, in June.

PFC Share Price Today

PFC shares were trading at Rs 354.15 on the NSE on Thursday. The stock was down 2.73%, or Rs 9.95, during the session. PFC opened at Rs 361.75, touched an intraday high of Rs 362.30 and fell to a low of Rs 352.35.

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