The Board of Directors of Power Finance Corporation Limited (PFC) and REC Limited (REC) on Sunday (June 28, 2026) approved the Scheme of Merger of REC (Transferor Company) into PFC (Transferee Company) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013.
The merger of REC into PFC shall create a financing entity with an aggregate loan book of over INR 11 lakh crore.
The Scheme is conditional upon and subject to, inter alia, receipt of all requisite approvals and consents required under applicable law, including approvals from the respective shareholders and creditors of both the companies and all relevant regulatory and governmental authorities. The merged entity shall continue to qualify as a ‘Government Company’ under the Companies Act, 2013, with the Government of India continuing to retain majority voting rights and control in the merged entity (directly or indirectly).
Pursuant to the Scheme and valuation report, the share exchange ratio for the proposed merger of REC into PFC shall be 88 equity shares of PFC of INR 10 each fully paid-up for every 100 equity shares of REC of INR 10 each fully paid-up, to be issued to the shareholders of REC as existing on a record date to be determined by the Boards of PFC and REC (as may be applicable) at a future date.
Deloitte Touche Tohmatsu India LLP acted as the Transaction and Tax Advisor, while Cyril Amarchand Mangaldas acted as the Legal Advisor to both PFC and REC. RBSA Valuation Advisors LLP was appointed by PFC for preparing the joint valuation reports. Ernst & Young Merchant Banking Services LLP was appointed by PFC, while SBI Capital Markets Limited and Nuvama Wealth Management Limited were appointed by REC for providing their respective fairness opinions on the joint valuation reports.
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