Company Overview
REC Limited, a Government of India Enterprise and Systemically Important NBFC, reported its annual results for FY 2025-26, demonstrating robust financial performance and strategic developments.
Financial Performance
REC achieved its highest-ever net profit of ₹16,282.26 crore, representing significant growth in a challenging economic environment. The company reported total income of ₹59,187.22 crore with interest income contributing ₹57,811.82 crore. Key financial metrics included:
- Loan book of ₹5,83,659.36 crore with disbursements of ₹2,11,189.25 crore
- Sanctions increased by 21% YoY to ₹4,09,096.50 crore
- Net worth stood at ₹84,290.41 crore with EPS of ₹61.71
- Return on Net Worth of 20.11%
- CRAR maintained at 23.11% with Tier-I capital of 21.25%
Asset Quality and Risk Management
The company maintained excellent asset quality with gross NPA at 0.24% and net NPA at 0.12%. REC implemented comprehensive risk management frameworks aligned with ISO 31000:2018 and maintained robust credit risk assessment processes. The company had foreign currency exposure of ₹146,388.73 crore, extensively hedged through derivative instruments.
Dividend and Capital Distribution
REC declared a total dividend of ₹18.55 per share for FY25-26, comprising four interim dividends (₹17.00 total) and a recommended final dividend of ₹1.55 per share subject to shareholder approval at the 57th AGM. The company paid ₹3,215.51 crore in dividends to its holding company, Power Finance Corporation Limited.
Corporate Governance and Board Changes
The company held 14 board meetings during FY26 but faced regulatory challenges with SEBI imposing fines of ₹0.60 crore for non-compliance with board composition requirements due to inadequate independent directors. Significant board changes included:
- Appointment of Shri Jitendra Srivastava as CMD effective April 22, 2025
- Appointment of Shri Thangarajan Subash Chandira Bosh as Director (Projects) effective October 3, 2025
- Appointment of Shri Rajesh Kumar as Director (Finance) effective April 2, 2026
- Multiple independent director appointments throughout the year
CSR and Sustainability Initiatives
REC demonstrated strong commitment to corporate social responsibility with total CSR expenditure of ₹338.07 crore across 77 projects in healthcare, education, and rural development. The company implemented environmental sustainability initiatives, achieved 100% green power at corporate offices, and reported a 76% reduction in Scope 2 emissions.
Strategic Developments and Merger Plans
The board approved an in-principle merger with Power Finance Corporation Limited to create a larger NBFC entity with improved efficiency and scale. The merged entity will remain a "Government Company" under the Companies Act 2013, with detailed proposals being formulated in accordance with applicable laws, pending Ministry of Power approval.
Regulatory Compliance and Challenges
REC maintained AAA credit ratings from all domestic agencies (CRISIL, CARE, India Ratings, ICRA) and international ratings (Moody's Baa3, Fitch BBB-, Japan Credit Rating Agency BBB+). The company faced regulatory fines from stock exchanges for corporate governance requirements but requested waivers citing appointment processes by the Government of India.
Future Outlook and Fundraising Plans
The 57th AGM scheduled for August 25, 2026, will seek shareholder approval for raising up to ₹1,40,000 crore through private placement of securities. REC continues to serve as nodal agency for key government schemes including PM-Surya Ghar Muft Bijli Yojana, Revamped Distribution Sector Scheme, and various rural electrification programs.
Subsidiary Performance
REC Power Development and Consultancy Limited, the wholly-owned subsidiary, recorded income of ₹501 crore and PAT of ₹79 crore with net worth of ₹764.10 crore as of March 31, 2026. The subsidiary transferred 9 project-specific SPVs to successful bidders during the year.