REC, PFC Shares Jump up to 6% on Lender Restructuring Announcement; Check the details

Synopsis: In the Union Budget 2026, Finance Minister Nirmala Sitharaman proposed restructuring public sector financial institutions, boosting efficiency and power-sector financing. Shares of REC and PFC surged 4.2% and 5.9%, respectively.

In the Union Budget 2026, Finance Minister Nirmala Sitharaman unveiled an ambitious blueprint to revamp India’s financial sector, highlighting a move toward stronger regulation, deeper markets, and more efficient public financial institutions.

The Shares of state-run lenders Power Finance Corporation and Rural Electrification Corporation surged after Finance Minister Nirmala Sitharaman proposed a restructuring of the organizations to enhance efficiency and strengthen power-sector financing. 

As part of efforts to strengthen public sector financial institutions, the government has proposed establishing a high-level committee to review the sector and align it with the next phase of growth. This indicates that the government is moving beyond incremental reforms and is prepared to reassess the overall structure, regulation, and functioning of banks.

Such a committee would likely focus on

• The capital requirements and governance of public sector banks.
• Competition and potential consolidation between public and private banks.
• Risk management, digital transformation, and cyber resilience.
• Financial inclusion, credit flow to priority sectors, and alignment with long-term growth objectives.

For banks, this could result in new recommendations regarding ownership norms, governance standards, and possible consolidation or specialization. For depositors and borrowers, the aim is to create a safer, more efficient banking system capable of supporting higher and more stable credit growth.

The moves are part of the government’s Viksit Bharat initiative and were announced during the Union Budget 2026 speech, complete with specific targets. NBFCs play a vital role in providing credit to segments often underserved by traditional banks, including MSMEs, small borrowers, rural areas, and niche sectors. 

For the market, this signals that NBFCs will continue to be central to India’s credit landscape, but within a more structured and closely supervised framework, aligned with the nation’s long-term 2047 “Viksit Bharat” goals.

Company Overview

REC Limited

REC Limited (formerly Rural Electrification Corporation Limited) is a premier Maharatna Central Public Sector Enterprise under India’s Ministry of Power, incorporated in 1969. As a leading NBFC and Infrastructure Financing Company, it finances the entire power sector value chain—generation, transmission, and distribution, including renewable energy, and increasingly invests in non-power infrastructure projects. 

With a market capitalisation of Rs. 96,086.34 Crores on Sunday, the shares of REC Limited jumped up to 4.2 percent, reaching a high of Rs. 380.00 compared to its previous close of Rs. 364.35.

Power Finance Corporation Ltd

Power Finance Corporation Ltd (PFC), incorporated in 1986, is a leading Schedule-A Maharatna CPSE and India’s largest non-banking financial company (NBFC) specializing in power sector financing. Under the Ministry of Power, it supports power projects (generation, transmission, distribution) and has recently expanded into infrastructure, logistics, and renewable energy. 

With a market capitalisation of Rs. 1,26,360.90 Crores on Sunday, the shares of Power Finance Corporation Ltd jumped up to 5.9 percent, reaching a high of Rs. 401.75 compared to its previous close of Rs. 379.35.

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