$PFC

Shares of Power Finance Corporation (PFC) and REC traded lower in early Monday trade after both state-run lenders approved their long-awaited merger scheme, paving the way for the creation of a power sector financing giant with a combined loan book exceeding Rs 11 lakh crore. PFC fell 1.83% to Rs 424.75, while REC slipped 0.32% to Rs 363.50. In separate exchange filings released late on June 28, the companies said their respective boards had approved the Scheme of Merger under Sections 230 to 232 of the Companies Act, 2013. Under the proposed arrangement, REC will be merged into PFC. As per the approved share swap ratio, REC shareholders will receive 88 equity shares of PFC for every 100 equity shares held in REC. The exchange ratio will be applicable based on a record date to be announced later by the boards of both companies. The merger is subject to approvals from shareholders, creditors, regulators and other statutory authorities. The companies also clarified that the scheme is contingent upon the merged entity continuing to qualify as a government company under the Companies Act, with the Government of India retaining majority ownership, voting rights and management control. The board approvals follow the announcement made by Finance Minister Nirmala Sitharaman in the Union Budget 2026, where the government proposed the restructuring of the two state-owned power financiers to improve operational efficiency and create a larger, stronger lending institution.