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.
