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’ approval 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.
Company details
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.
According to reports, stakeholders in the industry have repeatedly pointed out that ongoing reform efforts in the power infrastructure sector are crucial for drawing in investments for generation, transmission, and clean energy initiatives. The Budget’s emphasis on the restructuring of REC and PFC indicates a continued commitment by the Center to a reform-centric strategy for the power sector.
As stated by Power Secretary Pankaj Agarwal, India’s aim to quickly electrify its economy will necessitate an investment of $450 billion over the next seven years to develop new power plants, transmission networks, and energy storage systems, as per reports. He noted that the country’s per-capita electricity usage, which is currently one-third of the global average, is projected to triple by 2047, in line with the government’s objective to attain developed nation status by that year, according to reports.
On Friday, PFC shares closed 1.01% higher at ₹419.20 apiece on the BSE, while REC shares ended 2.51% lower at ₹372.50 per share.
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