Power Finance Corporation (PFC) has acquired 52.63% of the Government of India’s stake in REC Limited, making REC a subsidiary of PFC.

The PFC Board took note of the Union Budget 2026–27 announcement proposing the restructuring of public sector Non-Banking Financial Companies (NBFCs) and granted in-principle approval for the merger of PFC and REC, subject to requisite approvals, while ensuring that the merged entity remains a government company under applicable laws.

PFC said the merger details will be shared once finalized and approved.

Once completed, the merger will create a giant lender to the power sector. Renewable energy projects are beneficiaries of significant lending from the two agencies.

In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman proposed restructuring PFC and REC to achieve scale and improve efficiency in public-sector NBFCs.

Earlier in 2019, the Competition Commission of India announced that it had approved PFC’s acquisition of 52% stake in REC. In December 2018, the acquisition received an in-principle approval from the Cabinet Committee on Economic Affairs.

Recently, PFC launched Tranche I of its public issue of secured, listed, and redeemable non-convertible debentures (NCDs), aiming to raise ₹50 billion (~$554.18 million) as part of its broader ₹100 billion (~$1.108 billion) shelf program. Under Tranche I, PFC plans to raise ₹5 billion (~$55.42 billion) as the base issue size, with a greenshoe option to retain oversubscription of up to ₹45 billion (~$498.76 million), taking the total issue size to ₹50 billion (~$554.18 million).

PFC recorded a total revenue of ₹292.85 billion (~$3.42 billion) in the fourth quarter (Q4) of the financial year 2024-25, a 21.13% YoY increase from ₹241.76 billion (~$2.82 billion). It attributed the rise in total income to higher net interest income, which went up 38.36% to ₹120.92 billion (~$1.4 billion) from ₹87.39 billion (~$1.01 billion) in the corresponding quarter of the previous year.