PFC-REC Merger: What Shareholders Should Know and UBS View

India’s financial landscape is buzzing after the Power Finance Corporation (PFC) board gave in‑principle approval on February 6, 2026 to merge with REC Ltd, a move backed by the Union Budget 2026 to restructure key public sector lenders. The plan, still subject to approvals, aims to combine two major state‑run financiers into a stronger entity that can fund large power and infrastructure projects more efficiently.