Power Finance Corporation and REC boards meet Saturday, but the proposed merger faces a major stumbling block: the Centre’s stake could fall below 51% in the combined entity. Analysts estimate that keeping majority control may require a capital infusion of about ₹25,000 crore, even as fiscal pressure rises with a weaker rupee, high inflation, and muted growth in these lenders. Bond covenants also demand government majority ownership, raising questions. The merger is still planned for April 1, 2027.
Power Finance Corporation (PFC) and REC Ltd plan to merge by April 1, 2027, aiming to create a unified platform for financing India’s power sector. The deal has received in-principle approval, with legal and financial advisors appointed. Still, details are being worked out and will need regulatory clearance—while PFC flags potential concerns around RBI norms.
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Power Finance Corp’s FY26 Q4 profit rose 24% to Rs 6,325 crore, driven by higher interest income, improved fee income, and a reversal in impairment provisions. Lower credit costs and steady growth in core lending supported profitability even as finance costs increased, highlighting resilience in the state-run power sector lender’s earnings momentum.
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