PFC, REC Shares Decline Up to 4% Following Government Approval of Merger Plan

Power Finance Corporation and REC Shares Decline After Presidential Approval for Merger

Shares of Power Finance Corporation (PFC) and REC Ltd declined on Thursday after the proposed merger of REC into PFC received approval from the President of India. PFC shares fell as much as 4.2 percent to Rs 413.40, while REC dropped 3.6 percent to Rs 336.40 in afternoon trade. The stocks underperformed the broader market despite the government moving a step closer to consolidating the two lenders.

The proposed merger has received presidential approval, as informed by the companies to the stock exchanges on Wednesday. However, the final share swap ratio for the transaction has not yet been disclosed.

The merger process gained momentum earlier this year after PFC's board, on February 9, gave in-principle approval for the amalgamation of REC with itself. This proposal followed announcements made in the Union Budget 2026-27, where Finance Minister outlined plans to strengthen public sector non-banking financial companies through consolidation and improved operational efficiency.