State-run Power Finance Corporation (PFC) has taken a key step forward in its proposed merger with REC Limited by appointing external consultants to oversee the process.

Key Highlights

• PFC appoints RBSA Advisors and SBI Capital Markets to advance merger process with REC.
• Merger aims to create larger power financing entity improving efficiency and lending capacity in India.

According to reports, PFC has appointed RBSA Advisors as the valuation consultant and SBI Capital Markets as the merchant banker for the merger. This move signals tangible progress in the consolidation plan aimed at strengthening India’s power financing ecosystem.

The merger, first proposed in the Union Budget 2026–27, is part of the government’s broader strategy to streamline public sector non-banking financial companies (NBFCs) and create a larger, more efficient lending institution for the energy sector.

Once completed, the combined entity is expected to become India’s largest power sector financier, with a consolidated loan book exceeding ₹11 lakh crore. The merger is likely to enhance balance sheet strength, improve capital efficiency, and enable larger funding for infrastructure and clean energy projects.

Notably, PFC already holds a majority stake (over 52%) in REC, making the merger a logical next step toward consolidation and operational synergy.

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The appointment of consultants marks a critical milestone, as valuation and transaction structuring are essential steps before regulatory approvals and final execution. The merger is expected to improve credit flow to the power sector, including renewable energy and infrastructure projects.