The government is actively exploring options to maintain its majority stake in the merged entity following the restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). According to reports from ETEnergyworld, a senior official confirmed that discussions are ongoing over options to ensure the government stake in the merged entity does not fall below 51%. The government currently holds 55.99% stake in PFC and 52.63% in REC, with the remaining shareholding held by the public. As per the Companies Act, a 'government company' must have at least 51% of its stake held by the central or state government, and includes companies that are subsidiaries of such government companies.
The merged entity will emerge as the largest government-owned NBFC with enhanced strategic capabilities. As reported by ETEnergyworld, the combined company will have larger underwriting capacity for big ticket projects and enhanced risk absorption appetite. The merged entity will also enhance scope for portfolio diversification in sectors like renewables and transmission and better compete with peers in the market. The government would like to retain a majority stake in the merged entity as it would be the largest government-owned NBFC with strategic presence.
Both companies maintain substantial loan portfolios as of December 31, 2025. According to ETEnergyworld, PFC's consolidated loan asset book was ₹11.51 lakh crore, while REC's loan asset book was ₹5.82 lakh crore. Under the administrative control of the power ministry, PFC finances projects related to the power sector and holds 20% market share, while REC finances power sector projects involved in generation, transmission, distribution, renewable energy, and new technologies.
Both companies' shares were trading on BSE on Tuesday, with PFC shares at ₹407.95 per piece and REC shares at ₹329.05. As reported by ETEnergyworld, Finance Minister Nirmala Sitharaman had announced the restructuring in the FY27 Budget to help achieve scale and improve efficiency in the public sector NBFC space. The government is exploring options including issuance of preference shares by PFC to the promoter which is the government and issuance of fresh equity to the government to help increase its stake in PFC so that the merged entity remains a state-owned company.
