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Events / Business / PFC, REC Ltd Merger Approved
Business merger

PFC, REC Ltd Merger Approved

Analysis based on 19 articles · First reported Jun 28, 2026 · Last updated Jun 29, 2026

Sentiment
70
Attention
6
Articles
19
Market Impact
General
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Market Impact

The merger of Power Finance Corporation and ITC Limited is expected to have a positive impact on the financial markets, particularly within the power sector. The combined entity will create a significantly larger financing institution, enhancing its capacity to fund India's energy transition and infrastructure projects, which could lead to increased investment and growth in related industries. The share swap ratio and the creation of a stronger balance sheet are likely to be viewed favorably by investors, potentially boosting the stock prices of the merged entity and other companies involved in India's power sector.

Financial services Power industry
Event Summary

The boards of state-owned Power Finance Corporation and ITC Limited have approved a merger scheme, with ITC Limited being absorbed into Power Finance Corporation. This consolidation will create India's largest power financier, boasting a combined loan book exceeding Rs 11 lakh crore. The approved share swap ratio is 88 Power Finance Corporation shares for every 100 ITC Limited shares. The merger aims to enhance operational efficiency, strengthen the balance sheet, and position the combined entity as a key institution for financing India's energy transition, renewable energy projects, and overall infrastructure growth. The India — India, which owns a majority stake in Power Finance Corporation, initiated this move to improve public sector NBFCs. The merger is contingent on approvals from shareholders, stock exchanges, the India — Securities and Exchange Board of India, the India — National Company Law Tribunal, and other statutory authorities. Valuation reports were prepared by Ernst & Young and RBSA Valuation Advisors, with fairness opinions from Annex Wealth Management. Separately, ITC Limited's board also approved a plan to raise up to Rs 1.40 lakh crore through private placement of bonds.

Key Actions
100 Power Finance Corporation approved merger scheme ITC Limited
100 ITC Limited approved merger scheme Power Finance Corporation
70 India — India approved
50 ITC Limited approved proposal to raise
Entities Involved
stock
Power Finance Corporation
Power Finance Corporation will absorb ITC Limited, becoming India's largest power financier with an expanded loan book and improved operational efficiencies, strengthening its position in financing India's energy transition.
Importance 100.0 Sentiment 75.0
stock
ITC Limited
ITC Limited will merge into Power Finance Corporation, ceasing to exist as a separate entity. Its shareholders will receive 88 Power Finance Corporation shares for every 100 ITC Limited shares, and its assets will contribute to the combined entity's strength.
Importance 100.0 Sentiment 70.0
govactor
India — India
The India — India initiated and approved the merger to improve operational efficiency and strengthen the balance sheet of state-owned lenders, aiming to create a principal institution for power sector reforms. It will retain majority voting rights and control in the merged entity.
Importance 85.0 Sentiment 65.0
cnt
India
The merger supports India's energy transition and infrastructure growth by creating a larger financing institution capable of meeting the power sector's growing financial requirements and implementing government reforms.
Importance 80.0 Sentiment 60.0
govactor
India — National Company Law Tribunal
The India — National Company Law Tribunal's approval is required for the merger to become effective, ensuring legal compliance.
Importance 40.0 Sentiment 50.0
govactor
India — Securities and Exchange Board of India
The India — Securities and Exchange Board of India's approval is required for the merger to become effective, ensuring regulatory compliance.
Importance 40.0 Sentiment 50.0
priv
RBSA Valuation Advisors
RBSA Valuation Advisors served as an independent valuer, contributing to the determination of the share exchange ratio for the merger.
Importance 30.0 Sentiment 50.0
priv
Ernst & Young
Ernst & Young Merchant Banking Services LLP prepared a joint valuation report for the merger, contributing to the share exchange ratio determination.
Importance 30.0 Sentiment 50.0
priv
Annex Wealth Management
Annex Wealth Management provided a fairness opinion on the valuation reports, supporting the share exchange ratio.
Importance 30.0 Sentiment 50.0
subs
State Bank of India — State Bank of India
State Bank of India — State Bank of India was appointed as the merchant banker for the merger, playing a role in the financial advisory process.
Importance 30.0 Sentiment 50.0
priv
Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co served as the legal adviser to Power Finance Corporation and ITC Limited for the merger.
Importance 10.0 Sentiment 0.0
stock
Life Insurance Corporation
Life Insurance Corporation held approximately 3% stake in ITC Limited, making it a shareholder affected by the merger.
Importance 10.0 Sentiment 0.0
priv
Deloitte
Deloitte Touche Tohmatsu India LLP acted as transaction and tax adviser for the merger.
Importance 10.0 Sentiment 0.0
Relationships
Power Finance Corporation related ↔ India
ITC Limited related ↔ India
India — India related ↔ India
India related ↔ India — National Company Law Tribunal
India related ↔ India — Securities and Exchange Board of India
India related ↔ State Bank of India — State Bank of India
India — Securities and Exchange Board of India related ↔ State Bank of India — State Bank of India
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