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PFC slips 5% following Cabinet nod on merger with REC

The government has a total 58.3% stake in REC, the remainder of which is part of Bharat 22 ETF and CPSE ETF. The move will help the Centre meet its disinvestment target of Rs 800 billion for FY19

SI Reporter  |  New Delhi 

Power Finance Corporation, PFC, PFC logo
PFC logo. Photo: Wikimedia Commons

Shares of (PFC) fell as much as 4.76 per cent to Rs 85.95 per share on the in morning trade on Friday after the Committee on Economic Affairs (CCEA) Thursday gave an in-principle approval to the strategic sale of the Centre’s 52.63 per cent holding in to PFC, along with transfer of management control.

The has a total 58.3 per cent stake in REC, the remainder of which is part of Bharat 22 ETF and CPSE ETF. The move will help the Centre meet its disinvestment target of Rs 800 billion for FY19.

The said the acquisition intends to achieve “integration across the power chain, obtain better synergies, create economies of scale, and have enhanced capability to support energy access and efficiency to finance the power sector. It may allow for cheaper fundraising, with an increase in bargaining power for the combined entity.”

Business Standard had reported on Thursday that the power ministry believes PFC's acquisition of government’s stake in makes more financial sense for both the companies. Officials in the Department of Investment and Public Asset Management (DIPAM) had backed a proposal by to buy the Centre’s 65.6 per cent stake in The Centre’s stake in is valued at nearly Rs 160 billion, while its 58.3 per cent stake in REC is valued at Rs 120 billion. READ MORE

At 10:04 am, was trading at Rs 87 on the BSE, down 3.60 per cent against previous day's close of Rs Rs 90.25. A total of 14.07 million shares were traded on the and so far.

First Published: Fri, December 07 2018. 10:10 IST
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