The Board of Directors of both PFC and REC approved the Scheme of Merger on June 28, 2026, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The merger involves the merger of REC into PFC.
Key Financial Impact
The merged entity will create a financing entity with an aggregate loan book of over ₹11 lakh crore.
Share Exchange Ratio
The Share Exchange Ratio for the merger is set at 88 equity shares of PFC of ₹10 each fully paid up for every 100 equity shares of REC of ₹10 each fully paid up. These shares will be issued to shareholders of REC as existing on a record date to be determined by the Boards of PFC and REC at a future date.
Conditions Precedent
The merger is conditional upon and subject to:
- Receipt of all requisite approvals and consents under applicable law
- Approvals from respective shareholders and creditors of both companies
- All relevant regulatory and governmental authorities' approvals
- The Merged Entity continuing to qualify as a 'Government Company' under the Companies Act, 2013
- Government of India continuing to retain majority voting rights and control in the merged entity (directly or indirectly)
Advisors Appointed
- Deloitte Touche Tohmatsu India LLP: Transaction and Tax Advisor to both PFC and REC
- Cyril Amarchand Mangaldas: Legal Advisor to both PFC and REC
- RBSA Valuation Advisors LLP: Appointed by PFC for providing joint valuation reports
- Ernst & Young Merchant Banking Services LLP: Appointed by REC for providing joint valuation reports
- SBI Capital Markets: Appointed by PFC for providing fairness opinion on joint valuation reports
- Nuvama Wealth Management: Appointed by REC for providing fairness opinion on joint valuation reports
The disclosure was signed by Dinesh Garg, Company Secretary & Compliance Officer of REC Limited.