The Power Finance Corporation board of directors has, in principle, approved the merger of the company with Rural Electrification Corporation (REC). The move comes after the Ministry of Finance announced in the Budget 2026 that it would restructure the public sector Non-Banking Finance Corporations (NBFCs).
The public sector company said in an exchange filing that it has acquired 52.63 per cent government’s stake in Rural Electrification Corporation.
“Pursuant to ‘In Principle’ approval of Cabinet Committee on Economic Affairs (CCEA), PFC acquired 52.63% of Govt’s holding in REC Limited (REC). Accordingly, PFC and REC arc operating as holding and subsidiary companies.” Power Finance Corp said in the filing.
Budget 2026 announcement on merger
On February 1, Finance Minister Nirmala Sitharaman announced in the budget that the government is working towards a plan to improve efficiency and scale up public sector NBFCs. In Budget 2026, the Finance Minister proposed merging Power Finance Corporation and REC.
“The vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption. In order to achieve scale and improve efficiency in the Public Sector NBFCs, as a first step, it is proposed to restructure the Power Finance Corporation and Rural Electrification Corporation”, FM Sitharaman said in the Budget speech.
“The detailed merger scheme once finalised shall be shared after requisite approvals.”, Power Finance Corporation said in the exchange disclosure.
Power Finance Q3 results
Power Finance Corporation posted a nearly 6 per cent YoY rise in consolidated net profit to Rs 8,211.90 crore in Q3 FY26. It had reported Rs 7,759.56 crore profit for the year-ago period from continuing and discontinued operations.
The company’s total income rose by about 9 per cent to Rs 29,140.57 crore in the third quarter from Rs 26,821.84 crore in the corresponding period of the preceding financial year.