REC PFC merger approved by President of India, Ministry of Power filing confirms

The President of India has cleared the merger of REC Ltd into Power Finance Corporation, REC said. The approval came through a Ministry of Power letter dated June 10, 2026. The decision moved the long-pending plan forward. It came nearly seven years after PFC bought the Union government’s majority holding in REC.

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REC said the ministry letter conveyed consent from the competent authority. It stated: "the approval of the Competent Authority President of India in respect of the aforesaid proposal merger of REC into PFC.\" REC disclosed the development in a regulatory filing. The filing also linked the clearance to earlier board deliberations.

REC PFC merger approval and board action

On May 16, REC’s Board of Directors considered the merger plan. REC said the board \"reserved the proposal for the merger of REC into PFC\". REC linked this step to awaiting the President of India’s approval. The board discussion was referenced in the same chain of disclosures to stock exchanges.

REC said the merger would take effect after all legal approvals. Once effective, REC’s assets and liabilities would move to PFC. REC also said REC would be dissolved. REC cited Sections 230-232 of the Companies Act 2013 for the process.

REC PFC merger background and earlier acquisition

The merger plan followed PFC’s earlier takeover of the government stake in REC. In March 2019, state-owned PFC completed the purchase. PFC acquired 52.63 per cent in REC Ltd. The transaction value was Rs 14,500 crore, REC noted in its disclosure history.

Finance Minister Nirmala Sitharaman had also referred to this restructuring in the budget speech this year. She said the aim was scale and better efficiency in public sector NBFCs. She added: \"as a first step, it is proposed to restructure the Power Finance Corporation and REC erstwhile Rural Electrification Corporation.\"

With the President’s approval now communicated, the merger proposal moved to the next stage. REC said the transfer of all assets and liabilities would occur after the scheme became effective. REC’s dissolution would follow the Companies Act route. The timeline for completion depended on steps required under applicable law.

With inputs from PTI