PFC already owns 52.63% of REC after buying the government's stake. In a recent regulatory filing, PFC said its board considered the government’s plan to merge the two companies. The goal of the merger is to create a larger, more efficient lender and improve credit flow to India’s power sector. Finance Minister Nirmala Sitharaman proposed this merger during her Budget speech on February 1 to strengthen public sector NBFCs. Earlier, the Cabinet Committee on Economic Affairs approved PFC’s acquisition of REC’s government stake, making REC a subsidiary of PFC. The merger will combine both companies’ balance sheets, subject to all needed approvals. This could build a stronger lender to support power generation, transmission, distribution, and renewable energy projects. PFC funds the entire power value chain, while REC was set up to finance rural electrification, helping India near universal electricity access. On the stock front, PFC shares closed 0.6% higher at Rs 417.6, while REC shares dropped over 2% to Rs 372.6 on Friday. Despite recent moves, both stocks have stormed ahead over three years, with PFC up about 260% and REC up 217%. Technically, PFC is in the overbought zone with a 14-day RSI of 74.1 but shows strong bullish signs trading above all key simple moving averages. REC has a neutral RSI of 53.2 and trades above most moving averages, indicating mild bullish momentum. The planned merger aims to better serve India’s power and infrastructure needs by combining the strengths of these two power finance giants.