- 27 Sep 2022
- ICICIdirect Research
Power Ministry rejects REC proposal of selling PFC's stake to PGCIL
The government has rejected power financier REC Ltd’s proposal of its takeover by the Power Grid Corp of India (PGCIL). REC, which was accorded the Maharatna status last week, will continue to operate as PFC’s subsidiary and no decision has been taken on its merger with PFC.
It might be good for Power Grid as it is in the business of transmitting power and does not have any experience in financing projects. It was an unrelated diversification for Power Grid and may not be able to provide any expertise in this segment apart from that it would also impact Power Grid’s main business.