PFC and REC boards approve scheme to merge REC into PFC
The boards of Power Finance Corporation and REC Limited approved a scheme to merge REC into PFC, creating a financing entity with a loan book of over Rs 11 lakh crore, the Ministry of Power said on 30 June 2026.
Summary
The Boards of Directors of Power Finance Corporation Limited (PFC) and REC Limited approved a Scheme of Merger of REC (transferor) into PFC (transferee) under Sections 230 to 232 of the Companies Act, 2013, the Ministry of Power said on 30 June 2026. The merged entity will have an aggregate loan book of over Rs 11 lakh crore. REC shareholders will get 88 equity shares of PFC for every 100 REC shares (face value Rs 10 each). The scheme needs shareholder, creditor and regulatory approvals and requires the merged entity to remain a 'Government Company' with the Government of India retaining majority voting rights and control.
Key facts
- Merger
- REC (transferor) into PFC (transferee)
- Law
- Sections 230-232, Companies Act, 2013
- Share exchange ratio
- 88 PFC shares for every 100 REC shares
- Loan book
- Over Rs 11 lakh crore
- Condition
- Merged entity stays a Government Company; GoI keeps majority control
Practice MCQs 3 questions
Under the merger scheme approved by the boards of PFC and REC in June 2026:
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Correct answer: B — REC will merge into PFC
The scheme provides for merger of REC (Transferor Company) into PFC (Transferee Company).
What is the share exchange ratio fixed for the proposed merger of REC into PFC (June 2026)?
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Correct answer: D — 88 PFC shares for every 100 REC shares
REC shareholders will get 88 equity shares of PFC of Rs 10 each for every 100 equity shares of REC of Rs 10 each.
The PFC-REC Scheme of Merger (June 2026) was approved under which provisions of the Companies Act, 2013?
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Correct answer: A — Sections 230 to 232
The boards approved the Scheme under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013.