REC-PFC Merger: How Many Shares Will Investors Receive?

Synopsis: REC Ltd. and PFC shares are in focus as the board has approved a merger to create a major state-owned power financing entity with a loan book of over ₹11 lakh crore. The government will retain majority control. REC shareholders will get 88 PFC shares for every 100 REC shares. 

The shares of the REC and PFC, specialising in financing power sector projects, have approved the scheme of merger on Sunday, June 28, 2026. Both companies stated in their respective exchange filings which is an ambitious blueprint to revamp India’s financial sector.

With a market capitalisation of Rs. 96,007.35 Crores on the Day’s Trade, the shares of REC Ltd jumped upto 0.9 percent, reaching a high of Rs. 367.85 compared to its previous close of Rs. 364.55.

With a market capitalisation of Rs. 1,39,528.30 Crores on the Day’s Trade, the shares of Power Finance Corporation Ltd jumped upto 0.03 percent, reaching a high of Rs. 432.65 compared to its previous close of Rs. 432.50.

What Happened

The boards of Rural Electrification Corporation (REC Ltd.) and Power Finance Corporation (PFC) have approved a long-planned merger to form a large state-owned power financing entity. The combined organisation is expected to have a loan book exceeding Rs. 11 lakh crore, making it one of the biggest financial institutions in India’s power sector.

The merger is still not final and will need multiple clearances, including approvals from shareholders, creditors, regulators, and the government. Once completed, the new entity is expected to strengthen financing support for India’s power infrastructure and energy transition needs.

Government to Retain Control

After the merger, the combined entity will remain a government-owned company. The Government of India will continue to hold majority voting rights and retain control over its operations. As of the March quarter, the government held a 52.63% stake in REC Ltd, through its parent company PFC. This strong ownership position ensures continued public sector control even after the merger.

How many shares will investors receive?

As part of the merger scheme, REC shareholders will be issued 88 shares of Power Finance Corporation (PFC) for every 100 shares they hold. The exact record date for this share exchange has not yet been announced.

The merger will be executed in accordance with the provisions of the Companies Act, 2013, ensuring it follows all legal and regulatory requirements governing corporate restructuring in India.

Benefits of the Merger

As per PFC’s exchange filing, the merger is expected to create a strong institution that will play a central role in implementing power sector reforms and key government programs. The combined entity will serve as a major driver of policy execution in the sector.

It is also expected to benefit from a stronger balance sheet, better operational efficiency, and a larger capital base. This will enhance its ability to provide large-scale funding across the entire power sector value chain.

Additionally, the merged entity will act as a key financier for India’s energy transition and strategic infrastructure development, supporting long-term growth in clean energy and power infrastructure.

Company Overview & Others

REC Limited (formerly Rural Electrification Corporation Limited) is a premier Maharatna Central Public Sector Enterprise (CPSE) under the administrative control of the Ministry of Power, Government of India. Functioning as a prominent Non-Banking Financial Company (NBFC) and Infrastructure Finance Company (IFC), it provides comprehensive financial solutions and long-term loans across the entire power infrastructure value chain—including power generation, transmission, distribution, and green renewable energy projects.

The company’s revenue declined by 5.02 percent from Rs. 15,334 crores in Q4FY25 to Rs. 14,564 crores in Q4FY26. Meanwhile, Net profit declined from Rs. 4,310 crores to Rs. 3,375 crores in the same period.

Power Finance Corporation Limited (PFC) is a Maharatna Central Public Sector Enterprise under the Ministry of Power and India’s largest Non-Banking Financial Company (NBFC). It provides financial assistance to the power sector, including generation, transmission, distribution, and renewable energy projects, through term loans, refinancing, and other funding support for infrastructure development across the country.

The company’s revenue declined by 1.18 percent from Rs. 29,265 crores in Q4FY25 to Rs. 28,920 crores in Q4FY26. Meanwhile, Net profit rose from Rs. 8,358 crores to Rs. 8,598 crores in the same period.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post REC-PFC Merger: How Many Shares Will Investors Receive? appeared first on Trade Brains.