PFC–REC merger gets BSE and NSE no-objection letters; the scheme now heads to NCLT within six months

At 22:45 on Monday night, October 19, Power Finance Corporation told the exchanges that BSE and NSE had issued their no-objection letters for the scheme merging REC Limited with and into PFC under Sections 230–232 of the Companies Act, 2013 — the step that, in the NSE letter's own words, enables the company "to file the draft scheme with NCLT". The two Government of India entities closed Monday at a combined market value of roughly ₹1,89,311 crore — PFC at ₹332.40, REC at ₹302.35 — with both stocks within about six percent of the 52-week lows they set on October 1.

The paper trail in Monday's intimation runs as follows. Both boards approved the Scheme on June 28, 2026. The companies applied under Regulations 37 and 59A of the Listing Regulations; NSE forwarded the draft scheme to SEBI on September 28, and SEBI returned comments in letters dated October 9 and October 19. Most of those comments are disclosure prescriptions for the next stage: the notice seeking shareholder approval must set out the need and rationale for the merger, the basis for arriving at the share-swap ratio, summaries of the valuation report and fairness opinion, pre- and post-scheme shareholding, and three years of revenue, PAT and EBIDTA for both companies. Two comments are substantive conditions: the scheme comes into effect subject to the approval of the RBI, and any change in the share-exchange ratio pursuant to the issuance of additional securities to the Government of India needs fresh approval from the exchanges and SEBI. The exchange ratio itself is not stated anywhere in this intimation.

Two things stand out in that clause. First, the letter does not name which of the two listed entities has outstanding dues, or what those dues are — only that the observation letter "shall become effective only upon receipt of the requisite RBI approval and settlement of such dues by the listed entities". Second, it sits four days after REC's intimation of an RBI No Objection Certificate, and the available documents do not reconcile the two — whether the certificate REC reported is the "approval" NSE's letter is conditioned on is not stated. That makes the next scheme-related filing from either company the clarifying event, not a formality.

1. 1

   Board approvals

   Jun 28, 2026

   The boards of both PFC and REC approved the Scheme, subject to regulatory and other approvals, disclosed on June 28, 2026.

2. 2

   SEBI comments on the draft scheme

   Oct 9 & 19, 2026

   Conveyed through NSE's observation letter; SEBI letters dated October 9 and October 19, 2026. Observations must be incorporated in the NCLT petition.

3. 3

   BSE and NSE no-objection letters

   Oct 19, 2026

   Received October 19, 2026. NSE's letter is valid six months, within which the Scheme shall be submitted to NCLT.

4. 4

   RBI approval + settlement of outstanding dues

   NSE's letter records RBI approval as pending and makes the observation letter effective only upon that approval and settlement of one listed entity's outstanding dues. REC's October 15 filing is titled as receipt of an RBI No Objection Certificate; the documents available do not state whether that satisfies the condition.

5. 5

   NCLT filing and proceedings

   The petition goes to NCLT after the SEBI/exchange comment process, with the observations incorporated — within the letter's six-month validity.

6. 6

   Shareholder and creditor approvals

   Required from the shareholders and creditors of both companies under Sections 230–232; the notice must carry the SEBI-prescribed disclosures, including the basis for the share-swap ratio.

None of the pending gates carries a stated date. The only hard bound in the documents is the outer one: six months from October 19, 2026 — that is, by April 19, 2027 — the Scheme must be before NCLT, or the observation letter lapses.

Monday's NOC intimation landed after the close, so the first session in which it could trade is October 20 — beyond this report's price series; no market reaction can be read yet. REC's October 15 RBI-NOC intimation, also filed after close, was followed by a −0.6% close on October 16. The broader tape is weak for both names: PFC closed Monday 31.7% below its April 28 52-week high of ₹486.50, REC 22.1% below its October 2025 high of ₹388.30, and both set their 52-week lows on October 1 — ₹313.50 and ₹286.25 respectively — before recovering roughly six and five-plus percent into this week.

On standalone first-quarter numbers the two are close in scale: REC reported slightly higher revenue (₹14,296.10 Cr against ₹13,993.13 Cr) while PFC reported the higher net profit (₹4,745.40 Cr against ₹4,149.46 Cr). PFC's consolidated statement runs at roughly double its standalone — ₹28,526.86 Cr of revenue and ₹8,997.92 Cr of net profit in Q1 FY27. Promoter holding stood at 55.99% of PFC and 52.63% of REC as of June 30, 2026, unchanged from March in both cases. How these two balance sheets combine — and at what exchange ratio — is precisely what the SEBI-prescribed shareholder disclosures will have to spell out.