Power Finance Corporation Declares ₹3.90 Interim Dividend, Advances REC Merger Timeline
India's state-owned power financier reported Q1 results and set April 2027 as the appointed date for its proposed merger with REC Limited.
Dividend Declaration and Financial Compliance
Power Finance Corporation Limited (PFC) filed its quarterly debt compliance disclosures with Indian stock exchanges, covering Q1 FY 2026-27 ended June 30, 2026 (FIN SUPP filing, 2026-08-07). The Board of Directors approved a first interim dividend of 29% on paid-up equity share capital, amounting to ₹3.90 per equity share of ₹10 face value (FIN SUPP filing, 2026-08-07).
The filing also noted that the Board had previously recommended a final dividend of 39.50% (₹3.95 per share) for FY 2025-26, subject to shareholder approval at the upcoming Annual General Meeting (FIN SUPP filing, 2026-08-07). MarginX data shows the ₹3.90 dividend is scheduled for payment on August 27, 2026.
REC Merger Details Formalized
The company provided concrete details on its proposed merger with REC Limited, first approved by the Board on June 28, 2026. The share exchange ratio has been set at 88 equity shares of PFC for every 100 equity shares of REC Limited, with an appointed date of April 1, 2027 (FIN SUPP filing, 2026-08-07).
Under the draft scheme of merger by absorption, PFC will serve as the transferee company while REC Limited will be the transferor company. Upon effectiveness, PFC will issue equity shares to eligible REC shareholders based on the exchange ratio, while PFC's existing holdings in REC will be extinguished (FIN SUPP filing, 2026-08-07). The scheme remains subject to requisite approvals from statutory and regulatory authorities, as well as shareholders and creditors.
Asset Quality and Credit Provisions
The consolidated financial results revealed the group's credit impairment position as of June 30, 2026. For PFC and its subsidiary REC Limited, impairment loss allowance was provided based on Board-approved Expected Credit Loss (ECL) policies and independent agency assessments under Ind AS 109 standards (FIN SUPP filing, 2026-08-07).
The filing disclosed gross credit impaired assets ratio at 4.55% and net credit impaired assets ratio at 1.35% as of the quarter end (FIN SUPP filing, 2026-08-07). Additionally, the group maintained ₹53 crore in impairment allowance for Letters of Comfort and Undertaking, plus ₹596.41 crore for undrawn loan commitments (FIN SUPP filing, 2026-08-07).
Capital Structure Metrics
The company's debt-equity ratio stood at 6.37 times on a consolidated basis as of June 30, 2026, while total debt to total assets measured 0.86 times (FIN SUPP filing, 2026-08-07). Net worth was reported at ₹104,926.69 crore, with net profit after tax for the quarter reaching ₹5,128.19 crore (FIN SUPP filing, 2026-08-07). Basic and diluted earnings per share for the quarter came to ₹3.90 (FIN SUPP filing, 2026-08-07).
The filing noted that the group's operations comprise a single business segment—lending to power, logistics, and infrastructure sectors—with no other reportable business or geographical segments under Ind AS 108 (FIN SUPP filing, 2026-08-07).
MarginX data shows the President of India holds multiple tranches totaling over 133 million shares, reflecting the government's continued majority ownership of the state-owned enterprise.
This article was generated by MarginX from the FIN SUPP filing on 2026-08-07. It is not investment advice.