Sub: Outcome of Board Meeting held on June 28,2026.

1. Scheme of Merger with Power Finance Corporation Limited (PFC)

The approval was granted after considering the recommendations of the Audit Committee and the Independent Directors Committee. The scheme is pursuant to Sections 230 to 232 of the Companies Act, 2013, Section 2(6) of the Income Tax Act, 2025, and other applicable laws.

Key Terms of the Merger:

  • REC (Transferor Company) will be merged into PFC (Transferee Company) with effect from the Appointed Date on a going concern basis.
  • REC will be dissolved without winding up.
  • The share exchange ratio is set at 88 equity shares of PFC (face value ₹10 each) for every 100 equity shares of REC (face value ₹10 each).
  • These Consideration Shares will be issued to Eligible Shareholders of REC as on the Record Date.

Status and Next Steps:

The scheme is subject to necessary regulatory and other approvals. It will be filed with BSE Limited and the National Stock Exchange of India Limited to obtain their 'No Objection Letter' under Regulation 37 and 59A of the Listing Regulations.

A copy of the approved scheme will be made available on the company's website at https://recindia.nic.in/ after it is submitted to the stock exchanges.

Financial Snapshot (FY 2025-26 in ₹ crore):

| Entity | Basis | Net Worth | Turnover |

| REC Limited | Standalone | 84,290 | 59,140 |

| | Consolidated | 85,054 | 59,584 |

| PFC | Standalone | 1,02,532 | 58,504 |

| | Consolidated | 1,73,441 | 1,15,444 |

Related Party Transaction Status:

The transaction is not classified as a related party transaction requiring approval under Regulation 23 of the Listing Regulations, as it is between public sector companies. Furthermore, it is exempt from the requirements of Section 188 of the Companies Act, 2013, as per General Circular No. 30/2014 dated July 17, 2014, issued by the Ministry of Corporate Affairs.

Valuation and Fairness Opinion:

The share exchange ratio was determined based on a joint valuation report dated June 28, 2026, issued by independent valuers M/s. Ernst & Young Merchant Banking Services LLP and M/s. RBSA Valuation Advisors LLP. It is supported by a fairness opinion from SEBI-registered merchant bankers, M/s. Nuvama Wealth Management Limited.

Rationale for the Merger:

The disclosed rationale for the merger includes:

  • Creating the Government's principal institution for implementing power sector reforms and flagship programmes.
  • Forming a larger entity with improved balance sheet strength and a stronger capital base to fund India's energy transition and ambitious Viksit Bharat 2047 goals.
  • Enabling large-scale funding for generation, transmission, distribution, renewable energy, and emerging technologies like green hydrogen and energy storage.
  • Strengthening market confidence, improving borrowing capacity, financial flexibility, and enabling more competitive pricing for customers.
  • Maximizing the effectiveness of government schemes for the power sector.

Consideration and Shareholding Impact:

There is no cash consideration involved. Upon the scheme becoming effective, PFC will issue new shares to REC's shareholders per the 88:100 ratio, and the existing equity shares of REC will be cancelled.

2. Proposal for Raising Funds

The Board approved a proposal to raise funds through the private placement of unsecured/secured non-convertible bonds/deebentures up to ₹40,000 crore.

This fundraising is subject to approval from shareholders in the ensuing Annual General Meeting. The funds are to be raised in one or more tranches over a period of one year from the date of the shareholders' resolution, with the approval of the Competent Authority.

Meeting Logistics

The Board meeting commenced at 5:25 PM and concluded at 7:40 PM on June 28, 2026.