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1. At a Glance
Power Finance Corporation lends to India’s power sector. For the three months to June 2026 it reported consolidated revenue of ₹28,527 crore and profit after tax of ₹8,998 crore. Screener records the quarterly sales variation at -0.04% and the quarterly profit variation at 2.12%. A top line that moves by roughly the width of a rounding error is an unusual sight at this size.
Underneath the flat surface, the quarter was busy. On 28 June 2026 the board approved a draft scheme of merger by absorption. Under it REC Limited, currently PFC’s 52.63% subsidiary, folds into the parent. The exchange ratio is 88 PFC shares for every 100 REC shares. Presidential approval for the proposal came on 10 June 2026. The appointed date in the draft scheme is the opening of business on 1 April 2027.
Two directors joined the board in June. The July board approved raising the borrowing limit to ₹9,00,000 crore and USD 25 billion, subject to shareholders.
Group gross loan assets on a standalone basis stood at ₹5,70,045 crore. Net credit impaired assets, meaning bad loans after setting aside money against them, came in at 0.15%. An interim dividend of ₹3.90 per share was declared on 7 August 2026, with 27 August 2026 as the record date. The 40th annual general meeting is set for 31 August 2026.
For a lender whose work is handing enormous sums to state electricity boards, the quarter’s most closely read number was a share exchange ratio.
2. Introduction
PFC was set up in 1986 by the Government of India. Its purpose was funding and developing India’s power sector. It is a Systemically Important Non-Deposit taking NBFC, registered with the Reserve Bank of India as an Infrastructure Finance Company. In plainer English: very large, takes no fixed deposits, and lends only to people who build electricity.
The milestone list runs across four decades. It was incorporated in 1986 as a wholly government-owned entity. The IPO came in 2007, with listings on BSE and NSE. An FPO followed in 2010, after which Government of India shareholding settled at 56%. The first green bond arrived in 2017, at USD 400 million.
In March 2019, PFC completed the acquisition of the government’s 52.6% stake in REC for ₹14,500 crore. That made it India’s largest power sector financier, by the elegant method of buying the second-largest one. A new business line in infrastructure and logistics opened in 2023. The first foreign subsidiary, in IFSC GIFT City, followed in 2024. Loan assets crossed the ₹5 trillion mark in 2025. The Government of India awarded Maharatna status in October 2021.
Then came 2026. The Budget announced a PFC-REC restructuring, and the company that had spent seven years consolidating a subsidiary began the paperwork to stop having one.
The corporate journey since April has been unusually staffed. Shri Manoj Sharma and Shri Sandeep Kumar ceased as Directors, Commercial and Finance, effective 1 April 2026. Shri Rajesh Kumar Agarwal assumed charge as Director, Finance, and CFO on 23 April 2026. Shri V. Packirisamy assumed charge as Director, Commercial, on 2 June 2026. Shri Pankaj Gupta was appointed with effect from 22 June 2026.
Four board changes in a fiscal quarter is a lot of welcome-and-farewell catering. Management describes the organisation as running on roughly 520 employees.
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3. Business Model: WTF Do They Even Do?
PFC lends money to the Indian power sector. That is the whole thing. There is no factory and no inventory line on the balance sheet. Per the filings, there is exactly one reportable business segment: lending to power, logistics and infrastructure. The balance sheet runs to ₹12.4 lakh crore, and the segment note is a single sentence.
The product menu splits two ways. Fund-based lending covers project term loans, lease financing for equipment purchase, short and medium term loans to equipment manufacturers, and debt refinancing. Non-fund based covers deferred payment guarantees, Letters of Comfort, and a policy for guaranteeing credit enhancement.
That last category is the corporate equivalent of vouching for someone at the door. No cash leaves the building, yet the impairment allowance still carries a ₹18.55 crore line item for the Letters of Comfort and Undertaking. Accountants trust nobody, including their own reassurances.
The standalone loan book at 30 June 2026 breaks down as follows. Generation is ₹2,70,117 crore, of which conventional is ₹1,85,529 crore and renewable ₹84,588 crore. Distribution is ₹1,90,021 crore and transmission ₹44,161 crore. Infrastructure and logistics is ₹50,742 crore, with Others at ₹15,004 crore. Government sector stands at ₹4,36,836 crore against private sector at ₹1,33,209 crore. The presentation puts government at 77% and private at 23%.
Disbursements in the three months to June 2026 were ₹20,176 crore, against ₹36,152 crore a year earlier. Distribution took ₹9,837 crore of that, generation ₹5,413 crore and transmission ₹2,730 crore.
The group structure has a nesting-doll quality. PFC owns 100% of PFC Consulting and 100% of PFC Infra Finance IFSC, the GIFT City subsidiary. It owns 52.63% of REC, plus proportionately-consolidated associates such as Sakhigopal Integrated Power Company and Ghogarpalli Integrated Power Company. These are special purpose vehicles for ultra mega power projects. Three of them contributed a Group share of net profit of Nil crore for the quarter.
On security, ₹2,08,785 crore of the standalone book is secured by tangible
