India's PFC-REC merger positive, but government support remains critical, UBS says

REC

09/02/2026 06:57

** UBS says merger proposal of Indian power financiers PFC PWFC.NS and REC RECM.NS positive, but awaits more clarity on process

** Brokerage estimates for every 9 shares of REC, 8 shares of PFC would be offered; government stake could fall to 42% vs 56% in PFC

** Believes post merger, entity could see better margins and pricing power given larger overlap in customer base - UBS

** Adds, given that PFC, REC depend on implicit government support for cost of funds, continued support will be critical

** PFC and REC trim initial losses; last down 0.4% and 2.8%, respectively

** YTD, PFC up ~18%, REC up 1.7%

 (Reporting by Hritam Mukherjee in Bengaluru)

 ((Hritam.Mukherjee@thomsonreuters.com;))