Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) both are Indian government-owned financial institutions that fund the Power sector by providing loans and financial assistance to companies. But what are the differences between them?
Rural Electrification Corporation (REC)
REC Limited, formerly known as Rural Electrification Corporation Limited, is an Indian public sector enterprise established in 1969 under the administrative control of the Ministry of Power. Headquartered in New Delhi, REC is a ‘Maharatna’ company and a non-banking financial company (NBFC) registered with the Reserve Bank of India.
REC is a Strategic player in the Indian Power, infrastructure, and Logistics sector. 33 percent of the company’s loans are in the infrastructure and logistics sector. 60 percent of REC’s loans are in power distribution, followed by 16 percent in Generation and 12 percent in Renewables.
Out of the total Outstanding loans, 88 percent or 4,98,444 out of a total of 5,65,621 Crores are given to the State, and the other 12 percent or 67,177 are given to private companies. The top 3 states where they have disbursed the most loans are Tamil Nadu, Telangana, and Maharashtra.
The company reported an 18.42 percent YoY increase in revenue from Rs. 12,052 Crore in Q3FY24 to Rs. 14,272 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 4.31 percent in revenue from Rs. 13,682 Crore in the previous quarter.
Their Net profit saw an increase of 23.21 percent YoY from Rs. 3,308 Crore to Rs. 4,076 Crore for the same period. On a QoQ basis, the company reported an increase of 0.94 percent in Net profit from Rs. 4,038 Crore in the previous quarter.
Also read: Stocks to Watch: TCS, TRIL and 3 other stocks that are set to announce results next week
POWER FINANCE CORPORATION
Power Finance Corporation Limited (PFC) is an Indian public sector enterprise established in 1986 under the administrative control of the Ministry of Power. Headquartered in New Delhi, PFC is a leading non-banking financial company (NBFC) primarily engaged in providing financial assistance to the power and infrastructure sectors.
For FY 24, the PFC was one of the highest profit-making NBFCs in India and is the government’s key financial partner for driving reforms & developments in the Power sector. In Q3FY25, the Company has lended a majority 73 percent to Government sector and the other 27 percent to the private sector. They had Disbursements of Rs, 34,151 Crore for the quarter.
Out of the total loan disbursements, 60 percent has been given to power distribution companies, followed by 28 percent to power generation companies, and 7 percent to transmission, 5 percent accounts for Infrastructure logistics, and others.
The company reported a 13.68 percent YoY increase in revenue from Rs. 23,572 Crore in Q3FY24 to Rs. 26,798 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 4.18 percent in revenue from Rs. 25,722 Crore in the previous quarter.
Their Net profit saw an increase of 23.29 percent YoY from Rs. 6,294 Crore to Rs. 7,760 Crore for the same period. On a QoQ basis, the company reported an increase of 7.55 percent in Net profit from Rs. 7,215 Crore in the previous quarter.
KEY DIFFERENCES BETWEEN THEM
Power Finance Corporation (PFC) is the larger company with a stronger loan book and asset base, primarily financing large-scale power generation projects like thermal, hydro, and renewable energy plants. In contrast, REC Limited, its subsidiary, is more focused on rural electrification, specializing in the transmission and distribution segments to expand access in less urbanized areas under government initiatives.
Written By Abhishek Das
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
