REC rules out merger talks with PFC despite media report

A media report suggested that the government is considering merging state-run power financiers PFC and REC as part of a broader restructuring and consolidation plan for public sector NBFCs. In response, REC issued a formal clarification stating that it has not been involved in any talks, proposals or negotiations related to a merger with PFC.

The clarification comes after the Union Budget 2026 announcement about restructuring PFC and REC to improve scale and efficiency, which had already triggered market speculation about a possible combination of the two power-sector lenders. While the government may still evaluate various restructuring options at a policy level, REC’s statement indicates that there is no concrete merger process under way at the company’s end at this time.

Investors tracking both Navratna PSUs will likely watch for any future official communication from the government, the Ministry of Power, PFC or REC before re-rating the merger narrative further.

Key highlights

• Media report indicated the government is considering a merger of state-run PFC and REC.
• REC Ltd has clarified it is not engaged in any discussions or negotiations on such a merger.
• ​Budget 2026 proposed restructuring, not explicitly merging, PFC and REC.
• Market speculation on consolidation in power-sector financing remains policy-driven and not company-initiated at REC’s level.

Sources: Press Trust of India (PTI); The Economic Times; Business Standard; REC Ltd public clarifications and budget coverage reports.