What was filed
Power Finance Corporation Limited (PFC) informed the exchanges that its Board of Directors, at a meeting held on June 28, 2026, approved a scheme of merger by absorption between PFC (the Transferee Company) and REC Limited (the Transferor Company), along with their respective shareholders and creditors. The approval followed recommendations from the Audit Committee and the Committee of Independent Directors, per the filing. The scheme is framed under Sections 230 to 232 of the Companies Act, 2013, and other applicable provisions of the Income Tax Act, 2025, and the Listing Regulations.
How the merger is structured
Under the scheme, REC would merge into PFC on a going-concern basis with effect from an Appointed Date defined in the scheme. The filing states this would lead to the dissolution of REC without it being wound up, and the issuance of Consideration Shares to REC's eligible shareholders as on the Record Date. The exchange ratio disclosed is a share swap — REC holders would receive PFC equity in place of their REC holdings, rather than cash. PFC noted the scheme remains subject to the necessary regulatory and other approvals.
What remains open
The filing sets out the board's approval and the swap ratio, but the transaction is not complete. Key mechanics — the Appointed Date, the Record Date, and the identity of eligible shareholders — are defined only within the scheme document itself and are not spelled out in this intimation. PFC expressly stated the scheme is conditional on regulatory and other approvals that may be required.
Why it matters to a holder
Both PFC and REC are large state-owned power-sector lenders, and this filing signals a proposed consolidation of the two into a single entity. For a PFC shareholder, the disclosed exchange ratio determines how much new stock would be issued to REC holders; for a REC shareholder, it fixes what they would receive in PFC shares. Because the scheme still needs regulatory clearances and defines several terms only internally, the specific timing and final effect are not yet established in this filing.