Power Finance Corporation has incorporated Northern Region Power Transmission Limited as a wholly owned subsidiary of its consulting arm, PFC Consulting Limited (PFCCL). This Special Purpose Vehicle (SPV) is established to handle preparatory activities for transmission projects in the Northern Region Grid.

The incorporation follows the nomination of PFCCL as the Bid Process Coordinator (BPC) by the Ministry of Power. The National Committee on Transmission (NCT), in its 42nd meeting held on July 7, 2026, designated PFCCL for this role under the Tariff Based Competitive Bidding (TBCB) guidelines. The Central Electricity Authority (CEA) formally intimated this decision on July 20, 2026.

Role of the new subsidiary

The newly formed SPV is tasked with specific pre-development activities required before the bidding process concludes. These activities are critical for ensuring that the project profile is ready for competitive bidding by potential developers.

Transfer mechanism and ownership

Under the TBCB guidelines, the SPV serves as a temporary vehicle for these initial tasks. Once the international competitive bidding process is complete, the SPV will be transferred to the successful bidder. The successful bidder will then assume full responsibility for developing the transmission scheme.

This structure allows PFCCL to streamline the early-stage regulatory and logistical hurdles, such as land and forest clearances, thereby reducing the risk and timeline for private developers who eventually win the bid. The move underscores PFC's expanding role beyond financing into project development coordination through its specialized subsidiaries.

REC Limited received No Objection letters from the National Stock Exchange of India and BSE Limited on October 19, 2026, regarding the proposed merger with and into Power Finance Corporation Limited. This regulatory clearance enables the company to file the draft scheme with the National Company Law Tribunal.

The development follows the board approval of the scheme on June 28, 2026, which was contingent upon receiving applicable regulatory and other approvals. The exchanges issued their observations after processing comments from the Securities and Exchange Board of India.

Regulatory status and next steps

The proposed scheme involves the merger of REC Limited, acting as the transferor company, into Power Finance Corporation Limited, the transferee company. This action is undertaken under sections 230-232 and other applicable provisions of the Companies Act, 2013.

The exchange letters are conditional upon specific requirements, including the disclosure of pending litigation and compliance with listing regulations. The validity of these observation letters is six months from October 19, 2026, within which the scheme must be submitted to the NCLT.

Despite these clearances, the scheme remains subject to several pending conditions:

• Approval from the respective shareholders of both companies.
• Consent from the creditors of both entities.
• Fulfilment of other statutory and regulatory requirements as mandated by law.

Key conditions in exchange letters

The No Objection letters highlight critical compliance points that the companies must address before the scheme becomes effective:

• RBI Approval: The scheme's effectiveness is explicitly subject to final approval from the Reserve Bank of India. The observation letter becomes effective only upon receipt of requisite RBI approval and settlement of outstanding dues by the listed entities.
• Shareholder Disclosures: The explanatory statement sent to shareholders must detail the rationale for the merger, synergies, impact on shareholders, and cost-benefit analysis.
• Financial Transparency: Companies must disclose revenue, PAT, and EBITDA for the last three years, along with pre- and post-scheme shareholding patterns.
• Demat Requirement: Proposed equity shares issued under the scheme must be in dematerialised form only.
• No Changes to Draft: No changes can be made to the draft scheme except those mandated by regulators or tribunals, without SEBI's written consent.

Disclosure details

The intimation was made to the National Stock Exchange of India and BSE Limited under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure confirms that the company has taken the receipt of the certificate on record. The companies are required to disclose the No Objection letters on their websites within 24 hours of receipt.