PFC, REC Share Price Soar up to 6% After RBI’s Project Finance Relief

Market Performance

Shares of India's top project financing companies rallied on Friday following the Reserve Bank of India's announcement of a significant easing in provisioning norms for project loans.

• Power Finance Corporation (PFC) share price surged by 5.66% to hit ₹412.4 — the highest since April 15, 2025
• It later traded 5.4% higher at ₹411
• The REC share price jumped nearly 6% in early trading hours
• Indian Railway Finance Corporation (IRFC) shares rose to 2.3%
• The Nifty50 benchmark index was up 0.9%
• Bank Nifty index also gained 0.69% during the session

Main News

The Reserve Bank of India introduced new provisioning guidelines to ease the pressure on lenders involved in infrastructure and project financing. The revised framework will take effect on October 1, 2025.

Key highlights from RBI's new norms:

• Provisioning during the construction phase for all projects (excluding commercial real estate) was reduced to 1%
• For Commercial Real Estate (CRE), the requirement is now set at 1.25%
• For CRE - Residential Housing (RH), the provisioning will be 1%
• During the operational phase:
  • CRE provisioning will be 1%
  • CRE-RH will be 0.75%
  • Other project exposures will have a provision of 0.4%

Another critical update is that existing projects will be exempt from the increased provisioning norms. Earlier, the draft guidelines proposed stricter requirements even for ongoing projects.

Company Details

Both PFC and REC are prominent players in India's infrastructure and power financing space. These companies faced pressure in the second half of FY25 due to moderated asset growth and concerns over rising regulatory burdens. The RBI's updated norms provide significant relief for these lenders, offering a more balanced provisioning framework.

Summary of the Article

PFC and REC share prices saw sharp gains after the RBI announced a softer provisioning framework for project loans. PFC shares rose over 5%, while REC surged 6% following the news. The reduced provision requirements—especially during the construction phase—brought immediate cheer to the market. Importantly, existing projects are exempt from the stricter rules, which also helped lift investor sentiment. With this update, the RBI has offered considerable breathing room for project financiers like PFC and REC, reflected in their strong stock performance.