Budget 2026’s proposal to restructure Power Finance Corporation and Rural Electrification Corporation has revived merger speculation. Sitharaman said govt wants public-sector NBFCs to scale up and cut costs, with clear credit and tech targets. As a first step, it plans to restructure PFC and REC to drive scale and efficiency.Both lenders carry heavy exposure to power utilities and discoms, where borrowing needs should ease as billing and collections improve. That shift could push them to widen project financing, forcing strategy resets. PFC shares closed higher; REC slipped marginally in a weak market.Already major financiers of solar/wind/hydro/green hydrogen, PFC and REC could, post-restructuring, back India’s 2070 net-zero goal more forcefully.
