Boards of Power Finance Corporation and Rural Electrification Corporation approve merger

Pursuant to Finance Minister Nirmala Sitharaman’s budget announcement, the boards of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) informed the bourses on Friday (February 6, 2026) that they have accorded in-principle approval for a merger with each other.

Separately, they also told exchanges that further details about the merger would be disbursed once finalised after receiving the requisite approvals.

In her budget address on February 1, the Finance Minister had proposed the restructuring of the power sector non-banking financial institutions (NBFCs), seeking to “achieve scale and improve efficiency”. She outlined the vision for NBFCs, which entailed “clear targets for credit disbursement and technology adoption.”

Separately, speaking to The Hindu, Abhishek Nath, Sector Head for Energy and Power at the think-tank CSTEP, had said the move would help the NBFCs align with present requirements.

PFC at present is the promoter and holding company of REC. It had acquired 52.63% of REC’s paid-up share capital in March 2019.