PFC Share Price Falls Up to 4% and REC Slips as Government Gets Presidential Approval for Long-Awaited REC-into-PFC Merger Plan

The PFC share price fell up to 4% to an intraday low of approximately Rs 414 on Thursday, June 11, 2026, while REC Ltd slipped to an intraday low of Rs 339.55 (down 2.65%) after both state-owned power sector NBFCs disclosed that the President of India has approved the proposed merger of REC into Power Finance Corporation. The approval came via a Ministry of Power letter dated June 10, 2026, confirming that “the Competent Authority (President of India)” had cleared the merger proposal. The announcement moved a plan nearly seven years in the making a decisive step forward: PFC had acquired a 52.63% government stake in REC for Rs 14,500 crore in March 2019, and the formal merger was announced as a policy priority in the Union Budget 2026-27. The PFC share price sell-off reflects near-term investor uncertainty about the share exchange ratio and the implications for both sets of shareholders.

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PFC Share Price and REC: Today’s Market Data

Parameter	PFC	REC
NSE Symbol	PFC	RECLTD
Sector	Power Sector NBFC	Power Sector NBFC
Prev Close (June 10)	Rs 431.30	~Rs 348.80
Intraday Low	~Rs 414.05 (-4%)	Rs 339.55 (-2.65%)
Early Trade (9:25 AM)	Under pressure	Rs 343.90 (-1.40%)
Market Cap	Rs 1,42,333 crore (June 10)	~Rs 90,000+ crore
52-Week High	Rs 486.50	~Rs 434
52-Week Low	Rs 329.90	~Rs 223
FY26 Full Year PAT	Rs 25,900 crore (+12.7% YoY)	Rs 17,648 crore (est.)
FY26 Loan Book	Rs 11,64,000 crore	~Rs 6,00,000 crore
Role in merger	Surviving entity (absorbs REC)	Being dissolved into PFC
PFC stake in REC	52.63% (acquired Mar 2019 for Rs 14,500 Cr)	N/A

PFC-REC Merger: All Key Details

Merger Parameter	Detail
Trigger	Ministry of Power letter dated June 10, 2026
Approval authority	President of India (Competent Authority)
Budget announcement	Union Budget 2026-27: FM Nirmala Sitharaman
PFC in-principle board approval	February 6, 2026
REC board decision	May 16, 2026 , reserved for Presidential approval
Structure	REC merged INTO PFC; REC to be dissolved
Legal basis	Sections 230-232 of Companies Act, 2013
Share exchange ratio	Pending , to be determined by independent valuers
Combined entity status	Will remain a Government Company post-merger
Timeline	Final board approvals + statutory/regulatory clearances pending
PFC stake in REC	52.63% (acquired Mar 2019 for Rs 14,500 crore)
Government’s objective	Scale and efficiency in Public Sector NBFCs

Why the Merger Is Creating Selling Pressure

The PFC share price and REC typically rally on news of merger clearances in conventional corporate deals, but PSU merger dynamics work differently. The key investor concern is the share exchange ratio: until independent valuers set the ratio at which REC shareholders receive PFC shares, significant uncertainty persists. If REC is undervalued in the swap ratio, its shareholders will prefer to sell in the open market rather than wait. REC has been trading at a lower price-to-book and price-to-earnings multiple than PFC, partly because REC is a subsidiary. The merger eliminating REC as an independently listed entity also removes a separate investment option for market participants who preferred REC-specific exposure. For PFC itself, while a larger balance sheet improves fundraising economics, the PFC share price is absorbing the uncertainty of an integration that still has multiple regulatory and NCLT approval steps ahead.

Combined Entity: What Changes Post-Merger

Once the merger becomes effective under Sections 230-232 of the Companies Act, REC’s entire loan book (estimated at ~Rs 6 lakh crore) will transfer to PFC, creating a combined power sector NBFC with a loan book potentially exceeding Rs 17 lakh crore. This makes the combined entity India’s largest infrastructure lender by a significant margin. The merged PFC will retain its status as a Government Company. The PFC share price trajectory post-merger will depend on how efficiently the combined entity deploys capital and whether the scale advantage translates into meaningfully lower borrowing costs and higher margins.

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Conclusion

The PFC share price falling up to 4% and REC declining 2.65% intraday after Presidential merger approval reflects classic event-driven uncertainty: the approval is confirmed but the critical share exchange ratio remains pending. The merger creates India’s largest infrastructure lender but the near-term catalyst for price recovery will be the exchange ratio announcement. Track live PFC share price and REC merger updates on Univest.

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Frequently Asked Questions

Why are PFC and REC share prices falling on merger approval?

Ans. PFC share price and REC are both declining after the Presidential approval for the merger because the approval introduces near-term uncertainty about the share exchange ratio. The exchange ratio, which determines how many PFC shares REC shareholders will receive, has not yet been announced and will be set by independent valuers. REC shareholders are concerned the ratio may undervalue their holdings, while PFC shareholders worry about potential dilution. The merger also eliminates REC as an independent listed entity, removing the flexibility of investing in REC directly. Historically, PSU merger announcements tend to create short-term selling pressure in both stocks until the exchange ratio provides clarity.

What does the REC-PFC merger mean for shareholders?

Ans. For REC shareholders, the merger means they will receive PFC shares in exchange for their REC shares, based on an exchange ratio to be determined by independent valuers. The exact ratio is pending and will be a key determinant of value. If the exchange ratio is set at or above the current market price relationship between REC and PFC, REC shareholders benefit; if it undervalues REC, they lose. For PFC shareholders, the merger creates a larger combined balance sheet (estimated loan book of Rs 17,64,000 crore) and eliminates a subsidiary that was separately listed. PFC will remain the surviving entity. REC will cease to exist as a listed company once the merger is effective.

What is the timeline for the REC-PFC merger to complete?

Ans. The Presidential approval via the Ministry of Power letter dated June 10, 2026, is a significant milestone, but the merger is not yet complete. Several steps remain: the detailed merger scheme needs to be prepared and filed with the National Company Law Tribunal (NCLT), independent valuers need to determine the share exchange ratio, both PFC and REC boards need to formally approve the final scheme, shareholders of both companies need to approve the scheme through a court-convened meeting, and SEBI and RBI approvals are required for the listed PSU NBFC structure. PFC had earlier indicated the merger could be completed by April 2027, subject to receipt of all required approvals.

What is the strategic rationale for merging REC into PFC?

Ans. The PFC share price and REC are being merged to create a single, larger power sector NBFC with a combined loan book that could exceed Rs 17 lakh crore. Finance Minister Nirmala Sitharaman announced the merger in the Union Budget 2026-27, stating the goal is to achieve scale and improve efficiency in Public Sector NBFCs for credit deployment in the power sector. The combined entity will have enhanced borrowing capacity, allowing it to raise funds at lower costs in both domestic and international markets. PFC and REC already share a closely linked ownership structure since March 2019, when PFC acquired 52.63% of REC for Rs 14,500 crore. The merger formalises this integration.