Fitch affirms ratings of PFC, REC at 'BBB-' on merger plan; outlook 'stable'
This story was originally published at 17:25 IST on 17 February 2026
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--Fitch affirms ratings of PFC, REC at 'BBB-' on merger plan
MUMBAI – Fitch Ratings has affirmed the long-term issuer default ratings of Power Finance Corp. Ltd. and REC Ltd. at "BBB-" with "stable" outlook, the agency said in a release Tuesday. "The affirmation follows PFC and REC's 6 February 2026 announcement of in-principle approval to pursue a merger, in line with the Indian government's plan to restructure the entities to promote efficiency within the domestic energy sector," the rating agency said.
Power Finance Corp. and REC said Thursday the proposed merged entity will have adequate headroom for additional borrowings. The boards of Power Finance Corp. and REC had given in-principle approval for the merger earlier in February after the government's announcement on Feb. 1.
"The Stable Outlook reflects that the merger does not change our support expectations based on publicly available information, while any positive rating action is constrained by the IDRs (issuer default ratings) being already equalised with the sovereign's rating," Fitch Ratings said.
REC reported a net profit of INR 40.43 billion for the December quarter on a revenue of INR 149.11 billion. Power Finance Corp. reported a net profit of INR 47.63 billion for the quarter on a revenue of INR 146.56 billion. Tuesday, PFC's shares closed 1.3% higher at INR 416.95 on the National Stock Exchange and REC ended 1.4% higher at INR 358.60. End
Reported by J. Navya Sruthi
Edited by Rajeev Pai
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