Investors' concerns over PFC's acquisition of REC may finally end

Another aspect that worried investors was a likely rise in funding cost as the acquisition would partly be funded through debt

With Power Finance Corporation (PFC) acquiring the government’s entire stake of 52.85 per cent in REC, many investors were worried. 

The concerns were over the capital position of PFC, which would weigh on its loan book growth and profitability. 

But, it seems, the Street is now getting convinced about the deal. “After clarification on the deal, we believe PFC would be able to meet the regulatory requirements on capital ratio,” said Deepak Kumar, analyst at Narnolia Financial Advisors. The company management, too, is confident of sustaining the momentum.