The Board of Directors of Power Finance Corporation (PFC) has officially approved a proposal to merge REC Limited into its operations. The strategic move aims to consolidate the two entities under the provisions of the Companies Act, 2013, subject to final approvals from the Hon’ble President of India. Upon completion, all assets and liabilities of REC will be transferred to PFC, creating a unified entity that maintains its status as a Government Company.
Strategic Consolidation Plan
During the board meeting held on May 16, 2026, the leadership of Power Finance Corporation (PFC) formally advanced the merger plan with REC Limited. This significant corporate restructuring is designed to integrate the two financial powerhouses, with the process being driven by the Sections 230-232 of the Companies Act, 2013.
Approval and Execution Process
The merger is currently pending final approval from the Hon’ble President of India. The board has authorized the Chairman and Managing Director (CMD) to initiate formal applications for this process. A critical condition of the merger is the determination of an appropriate share exchange ratio, to be finalized by independent valuers. Furthermore, the company is committed to ensuring that the merged entity retains its core designation as a Government Company, which may involve additional capital infusion or securities issuance by the Central Government.
Impact on Trading and Operations
Following the announcement, the company has confirmed that the Trading Window for all equity shares and listed debt securities, including tax-free bonds, will remain closed until further notice. This measure is in line with standard protocols regarding price-sensitive information to protect investor interests. Once all regulatory and legal approvals are secured, REC Limited will be dissolved, and its entire portfolio of assets and liabilities will be legally absorbed into PFC.
Source: BSE
