In a major move aimed at consolidating public sector non-banking financial companies (NBFCs), Power Finance Corporation Ltd. (PFC) has acquired 52.63% of the government’s holding in REC Limited (REC), effectively making REC its subsidiary. The acquisition comes following the ‘in-principle’ approval of the Cabinet Committee on Economic Affairs (CCEA).
The acquisition comes after the Union Budget 2026-27 vision for NBFCs, which emphasises scaling up credit disbursement and adopting technology to enhance efficiency. Finance Minister in his budget speech noted:
“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.”
Following this, PFC’s Board of Directors in its meeting on February 6, 2026, approved the acquisition and took note of the budget announcement, giving in-principle approval for a future merger of PFC and REC. The Board also clarified that post-merger, PFC will continue to remain a “Government Company” under the Companies Act, 2013 and other applicable laws.
