Power Finance Corporation (PFC) has received 'No Objection' letters from NSE and BSE regarding its proposed merger with REC Limited. While this marks a significant regulatory milestone allowing the companies to proceed with NCLT filings, the merger remains subject to crucial pending approvals from the Reserve Bank of India (RBI), as well as shareholder and creditor consent.
PFC Gains Exchange Nod for REC Merger
PFC has secured 'No Objection' letters from both NSE and BSE for the REC merger.
The transaction now moves toward NCLT filing, contingent upon RBI and creditor approval.
Reader Takeaway: Exchange clearance is a vital procedural milestone, but RBI approval remains the primary hurdle for finalization.
What just happened
Power Finance Corporation (PFC) announced on October 19, 2026, that it has received formal observation letters from the National Stock Exchange (NSE) and BSE Limited. This follows the proposed scheme of merger for REC Limited (the transferor) to merge into PFC (the transferee). This regulatory green light allows both power sector financiers to initiate filings with the National Company Law Tribunal (NCLT).
Why this matters
This merger consolidates two of India's largest power-sector non-banking financial companies (NBFCs). For shareholders, the move signifies progress in a long-anticipated structural change aimed at creating a unified entity with greater capital strength and streamlined operations. The receipt of these letters confirms that the exchanges have reviewed the scheme under SEBI regulations and found no grounds for objection, provided strict compliance conditions are met.
The backstory
The proposed merger has been under review for some time as part of a broader government push to optimize the capital structure of state-run financial institutions. The process requires navigating complex regulatory frameworks, including SEBI, the Companies Act, and, critically, the Reserve Bank of India (RBI).
Risks to watch
Investors should note that the 'No Objection' letters are conditional. Key risks include:
- RBI Approval: The scheme is explicitly conditional upon receiving final approval from the RBI.
- Regulatory Compliance: PFC and REC must ensure full settlement of outstanding dues and transparent disclosure of all ongoing legal or recovery proceedings.
- Timeline: The companies have a six-month window from the letter date to file the scheme with the NCLT. A delay could invalidate these current exchange observations.
What to track next
The next critical milestones include the official filing with the NCLT and the subsequent scheduling of meetings for shareholders and creditors to vote on the merger scheme. Monitoring official updates for RBI clearance will be the most important signal for the deal’s ultimate success.