Shares of state-owned financial institutions REC and Power Finance Corporation (PFC) saw a significant rise in their stock prices, reaching all-time highs on the BSE amidst a generally weak market. REC surged by 4 per cent to Rs 636.80, while PFC gained 3 per cent, reaching Rs 567.55 on the BSE. This increase comes as the BSE Sensex was down by 0.71 per cent at 79,780 at 12:09 pm.
Over the past year, REC and PFC have experienced remarkable growth, with REC soaring by 278 per cent and PFC by 215 per cent, compared to the benchmark index’s 22 per cent rally. Both REC and PFC are ‘Maharatna’ Central Public Sector Enterprises categorized as Infrastructure Finance Companies by the Reserve Bank of India. They play a crucial role in providing financial services to the entire power sector value chain.
REC and PFC are also instrumental in implementing the Revamped Distribution Sector Scheme (RDSS), a reform-based scheme with an outlay of Rs 3.04 trillion over five years. This scheme aims to financially revive power distribution companies in India. Additionally, both institutions are involved in financing rural electrification programs such as the Deendayal Upadhyaya Gram Jyoti Yojana and the Saubhagya scheme, as well as the National Electricity Fund Scheme.
REC has been designated as the sole nodal agency for operating the National Electricity Fund Scheme, an interest subsidy scheme introduced by the government to boost capital investment in the power distribution sector. CRISIL Ratings predicts that REC will continue to benefit from government support due to its strategic role in implementing power sector initiatives. The institution is expected to maintain a strong position in infrastructure financing with solid capitalization and earnings.
Overall, REC and PFC’s recent performance reflects their key role in supporting the power sector and contributing to the country’s development.