New Delhi: Maharatna PSU Power Finance Corporation (PFC) has issued a formal clarification denying any ongoing negotiations or events related to a merger with Rural Electrification Corporation (REC), responding to recent media reports that triggered speculation across Dalal Street.
In its disclosure to stock exchanges under Regulation 30 of SEBI (LODR) Regulations, PFC stated that the news article suggesting the government is considering a merger of PFC and REC is not backed by any current discussions or decisions at the company level.
What PFC Clarified
PFC confirmed that:
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No merger negotiations or events are currently taking place
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There is no undisclosed information that could explain market activity in the stock
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There are no regulatory or legal proceedings related to the reported merger
The company reiterated its commitment to timely disclosures and transparency in line with SEBI norms.
Important Background Investors Should Know
PFC highlighted that it already acquired 52.63% government stake in REC in March 2019, following in-principle approval by the Cabinet Committee on Economic Affairs (CCEA). Since then:
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REC is a subsidiary of PFC
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PFC is the promoter of REC
This historical structure is crucial, as it means any future restructuring would be internal to the group and policy-driven.
Union Budget 2026 Statement Explained
The clarification also referred to the Union Budget 2026 announcement, where the Finance Minister stated that the government proposes to restructure PFC and REC to improve efficiency and scale in public sector NBFCs.
PFC clarified that:
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The Budget announcement is a policy intent, not a merger decision
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The proposal will be deliberated in an upcoming board meeting
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Any outcome will be disclosed to exchanges as per regulatory requirements
Investor View: What This Means for PFC Stock
For investors, the statement reduces uncertainty around forced or immediate structural changes. While restructuring could unlock long-term synergies, PFC has made it clear that no actionable decision exists as of now.
Market experts note that PSU NBFC stocks often react sharply to merger speculation. This clarification helps stabilize sentiment and reinforces confidence in PFC’s governance and disclosure standards.
Bottom Line
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No active merger talks between PFC and REC
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Media report does not reflect current company-level developments
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Budget proposal to be reviewed by PFC board
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Any decision will follow regulatory disclosure norms