“The boards of directors of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) Limited have approved a scheme of merger for the two power sector companies,” according to an official statement issued on Monday (June 29, 2026).

The merger will create a financing entity with an aggregate loan book of more than ₹11 lakh crore. “The merger has been approved under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013,” the statement said.

“The board of directors of PFC and REC Limited approved the Scheme of Merger (Scheme) for merger of REC (Transferor Company) into PFC (Transferee Company) and their respective shareholders and creditors, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013,” it said.

Pursuant to the scheme and valuation report, the share exchange ratio for the proposed merger of REC into PFC shall be 88 equity shares of PFC of ₹10 each fully paid up for every 100 equity shares of REC of ₹10 each fully paid up to be issued to the shareholders of REC as existing on a record date to be determined by the boards of PFC and REC.

Deloitte Touche Tohmatsu India LLP is acting as transaction and tax advisor and Cyril Amarchand Mangaldas as the legal advisor, to the two non-banking financial companies.

PFC had appointed RBSA Valuation Advisors LLP while REC appointed Ernst & Young Merchant Banking Services LLP to provide joint valuation reports.

SBI Capital Markets was appointed by PFC and Nuvama Wealth Management was appointed by REC, for providing their respective fairness opinions on the joint valuation reports.