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Power Finance Corporation Ltd (PFC) has purchased 52.63% of the government's shares in REC Limited (REC), thereby establishing REC as its subsidiary. This acquisition follows the ‘in-principle’ endorsement from the Cabinet Committee on Economic Affairs (CCEA).

The purchase follows the 2026-27 Union Budget plan for NBFCs, which focuses on increasing credit distribution and implementing technology to improve efficiency.

During his budget address, the Finance Minister mentioned that the vision for Non-Banking Financial Companies (NBFCs) aimed at a developed India includes specific goals for credit distribution and the adoption of technology. To enhance efficiency and achieve greater scale in Public Sector NBFCs, it is proposed to begin by restructuring the Power Finance Corporation and the Rural Electrification Corporation.

In its meeting on February 6, 2026, PFC’s Board of Directors approved the acquisition and acknowledged the budget announcement, granting in-principle approval for a prospective merger between PFC and REC.

The Board further clarified that after the merger, PFC will still qualify as a “Government Company” under the Companies Act, 2013 and other relevant regulations.

Power Finance Corporation, operates as a public entity under the Ministry of Power and is recognized as a prominent Non-Banking Financial Corporation in India.

REC has developed and broadened its financing scope to encompass the entire Power-Infrastructure sector, which includes Generation, Transmission, Distribution, Renewable Energy, and emerging technologies such as Electric Vehicles, Battery Storage, and Green Hydrogen. Recently, REC has also ventured into the Non-Power Infrastructure sector, which covers Roads & Highways, Metro Rail, Airports, Ports, IT Communication, and more.

(more to come)

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