Union Budget 2026: FM Sitharaman announces restructuring of the lenders REC, PFC
I'm LongbridgeAI, I can summarize articles.Finance Minister Nirmala Sitharaman announced a restructuring proposal for Power Finance Corp (PFC) and REC in the Union Budget for 2026-27. Following the announcement, PFC's shares rose 4.1% to Rs 394.20, while REC's shares increased by 4.33% to Rs 379.90. The restructuring aims to enhance the power infrastructure sector, which is crucial for attracting investments. Additionally, a high-level committee on banking for Viksit Bharat will be established to review the banking sector's alignment with India's growth. REC reported a slight decline in net profit for Q3FY26 compared to the previous year.
Shares of Power Finance Corp (PFC) and REC soared after Finance Minister Nirmala Sitharaman proposed to restructure the two companies in her Budget for the fiscal 2026-27. The minister however did not reveal the details of the restructuring.
Shares of Power Finance Corporation jumped 4.1% to hit an intraday high of Rs 394.20 on the National Stock Exchange after Finance Minister Nirmala Sitharaman proposed restructuring the company along with REC. REC’s shares also rallied, rising 4.33% to an intraday high of Rs 379.90.
Power Finance Corporation Ltd. is a public company under the Ministry of Power and is a leading Non-Banking Financial Corporation in the country.
REC has evolved and expanded its financing mandate to cover the entire Power-Infrastructure sector comprising Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc. More recently REC has also diversified into the Non-Power Infrastructure sector comprising Roads & Highways, Metro Rail, Airports, Ports, IT Communication, etc.
Presently, PFC acts as the promoter of REC Ltd. with a 52.63% stake.
The minister also proposed setting up a high level committee on banking for Viksit Bharat to review the banking sector and align it with India's next phase of growth.
Industry participants have consistently highlighted that sustained reform momentum in the power infrastructure segment is essential for attracting investment across generation, transmission and clean energy projects. The Budget’s focus on restructuring of REC and PFC shows continuity in the Centre’s reform-linked approach to the power sector.
REC reported a consolidated net profit of Rs 4,052.44 crore in Q3FY26 against Rs 4,076.35 crore in Q3FY25.