New Delhi: The boards of state-owned Power Finance Corporation (PFC) and REC Ltd on Sunday approved the merger scheme between the two power sector financiers, with a share swap ratio of 88 PFC shares for every 100 shares of REC.

The approvals came after the board meetings of both companies concluded late on Sunday, paving the way for creating of India’s largest power sector financing institution with a combined loan book of more than Rs 11 lakh crore.

PFC owns a 52.6% stake in REC. The Centre owns 55.99% in PFC but doesn’t directly own a stake in REC.

“The share exchange ratio for the proposed merger of REC into PFC shall be 88 equity shares of PFC of Rs10 each fully paid up for every 100 equity shares of REC of Rs 10 each,” information on stock exchanges by the companies said.

The scheme provides for merger of the companies by absorption of REC into PFC with effect from April 1.

The merger will now require approvals from shareholders, stock exchanges, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT) and other statutory authorities before becoming effective.
The Centre had announced plans to consolidate the two state-owned lenders to improve operational efficiency, strengthen their balance sheet and create a larger institution capable of meeting the power sector’s growing financing requirements.The merger process gathered pace after the boards of the two companies granted in-principle approval earlier this year. The government subsequently obtained the President’s approval to proceed with the amalgamation and appointed SBI Capital Markets as merchant banker and RBSA Valuation Advisors as the independent valuer for determining the share exchange ratio.

PFC and REC are focused on the power sector, funding generation, transmission, distribution, renewable energy, battery storage and other energy infrastructure projects. The combined entity is expected to play a larger role in financing India’s energy transition and the massive investment planned in electricity infrastructure over the coming decade.

The government in the FY27 budget announced that it seeks to achieve scale and improve efficiency in public sector NBFCs and as a first step it proposed to restructure PFC and REC.

The boards of both companies subsequently approved a merger plan, stating that the new entity will remain a government company, clearing the air over ownership.

Mumbai: The success of the Reserve Bank of India‘s June measures to attract foreign currency inflows will hinge on whether the country can strengthen its balance of payments (BoP) over the next three to five years, economists said, warning that these steps only defer external sector risks.

The central bank earlier this month offered a concessional swap facility for external commercial borrowings (ECBs) and foreign currency non-resident bank (FCNR[B]) deposits to attract dollar inflows amid a sharp depreciation of the rupee, effectively buying policymakers time at a cost largely borne by the RBI.

The inflows, however, are temporary. As ECBs mature and FCNR(B) deposits come due over the next three to five years, those dollars will need to be repaid, reversing the inflows. By then, India will require either a stronger BoP or a larger stock of foreign exchange reserves to absorb the outflows without putting pressure on the rupee.

Market participants estimate the measures could bring in between $40 billion and $70 billion, providing a window to improve the country’s external position before these liabilities fall due. As things stands, forex reserves of $672 billion are currently adequate to provide import cover for about 11 months, RBI governor Sanjay Malhotra has often said in media interaction.

“India’s foreign exchange reserves need to rise organically, not just on account of banking inflows, to the extent that the RBI can retire this debt three to five years later. BoP is a larger concern because we are in a structurally different world where financial conditions are tight and capital inflows are scarce,” said Dhiraj Nim, economist and FX strategist at ANZ Bank.

“No one knows what the situation will be three years from now. But if it doesn’t change, we will get back to where we were a month ago,” Nim said. India’s BoP has grown volatile in recent years due to swings in capital flows. After recording a surplus in FY23- 24, the country posted deficits in FY25 and FY26, reflecting weak financial inflows, particularly on the capital account.
Concerns over sustaining inflows are also linked to structural factors. India has yet to establish a leading position in emerging sectors such as artificial intelligence, while the outlook for software exports—a key source of foreign exchange earnings—is becoming more uncertain, market participants said. A further risk stems from currency movements. A weaker rupee would raise the cost of servicing these liabilities, as the dollars mobilised under ECB and FCNR(B) routes become more expensive to repay in rupee terms, increasing the effective cost for the central bank.

Unlike the 2013 episode, when similar measures were introduced during a balance of payments crisis, the current steps are pre-emptive. “If the rupee weakens further over the next few years, the RBI will end up bearing a higher cost. The measures this time versus 2013 are pre-emptive rather than crisisdriven,” said Abhishek Upadhyay, senior economist, fixed income strategy, at ICICI Securities Primary Dealership.

Technical analysts remain cautiously bullish on the Nifty this week, expecting the index to extend its gains towards the 24,300–25,000 zone if it breaks above key resistance levels, while advising traders to remain selective amid continued volatility. The positive outlook comes after India’s benchmark indices posted gains for a third straight week, supported by easing crude oil prices, although they surrendered most of their intraday gains ahead of the long weekend.

RAJESH PALVIYA

HEAD OF RESEARCH, AXIS SECURITIES

Trading Strategy
For the July 7 expiry, a moderately bullish Call Spread strategy is recommended. Buy one lot of the 24,100 Call option at a premium of Rs 195–175 and simultaneously sell one lot of the 24,400 Call option at a premium of Rs 75–85. The strategy has a break-even point at 24,220, with a maximum potential loss of Rs 7,800 and a maximum profit of Rs 11,700.

TOP STOCK PICKS

TVS Motor: Buy | CMP: Rs 3,569.70 | Target: Rs 3,700– 3,720 | Stop loss: Rs 3,490
TVS Motor has broken above a minor double-top formation and its price channel is on strong volumes. The daily RSI has moved above 60, while fresh long accumulation, reflected in a 3.5% rise in price and a 0.1% increase in open interest, points to strengthening bullish momentum.
Samvardhana Motherson International: Buy | CMP: Rs 151.70 | Target: Rs 160–162 | Stop loss: Rs 144
The stock rallied 4.9% on Thursday alongside a 0.8% decline in futures open interest, signalling a classic short-covering rally. Weekly and monthly breakouts, backed by the highest single-day volume and price gain of the month, reinforce the ongoing structural uptrend.

ROHAN SHAH
TECHNICAL ANALYST, ASIT C. MEHTA INVESTMENT INTERMEDIATES

Trading Strategy
The index has been consolidating within a corrective trend since April 2026, with the 20-week EMA continuing to cap upside attempts. A breakout above 24,300 would improve the technical outlook and open the door for further gains. Buy Nifty futures above 24,300, with a stop loss below 24,000 and targets of 24,800–25,000.

TOP STOCK PICKS
Oberoi Realty: Buy | CMP: Rs 1,749 | Target: Rs 1,930 | Stop loss: Rs 1,650

Oberoi Realty has broken out of an inverse head and shoulders formation, confirming a bullish reversal. The breakout, supported by robust volumes and improving momentum, indicates the potential for further upside.

Aurobindo Pharma: Buy | CMP: Rs 1,555 | Target: Rs 1,725 | Stop loss: Rs 1,475

Aurobindo Pharma is expected to continue its outperformance. The stock has broken out of a multi-month cup-and-handle pattern on strong volumes, indicating the potential for sustained upward momentum.

SUDEEP SHAH
HEAD – TECHNICAL & DERIVATIVE RESEARCH, SBI SECURITIES

Trading Strategy
With markets trading in a broad range amid sharp volatility, traders should refrain from overleveraged bets, while investors should adopt a buy-on-decline approach in quality stocks with strong technical setups. Go long on Nifty only on a breakout above 24,200, with a stop loss at 23,950 and a target of 24,650. From a sectoral perspective, select private banks, financials, pharma, healthcare, tourism and auto stocks are expected to perform well, while Nifty IT, CPSE, PSE and metals are expected to remain under pressure and continue their underperformance in the near term.

TOP STOCK PICKS
Vijaya Diagnostic Centre: Buy | CMP: Rs 1,367 | Target: Rs 1,490– 1,550 | Stop loss: Rs 1,300

The stock is trading above its key moving averages across timeframes, reflecting sustained bullish momentum. After a six-week consolidation, it has broken out strongly, with buying emerging on every dip, while its relative strength against the diagnostics sector and the broader market remains favourable.

Mahindra & Mahindra Financial Services: Buy | CMP: Rs 328 | Target: Rs 344–350 | Stop loss: Rs 316

The stock has broken out of a four-week consolidation and is holding firmly above its key moving averages. Buying on dips, rising volumes, supportive momentum indicators and improving relative strength against the broader market suggest further upside potential.

Mumbai: Overseas investors slowed selling of Indian equities in June, with monthly outflows on track to be the lowest in this year’s selling months as easing crude oil prices and receding geopolitical tensions helped improve sentiment. February was the only month in 2026 when foreign investors were net buyers.

Since the US and Iran reached an initial agreement to reopen the Strait of Hormuz on June 15, foreigners have been buyers in seven out of the eight trading sessions.

Foreign portfolio investors sold shares worth ₹31,823 crore so far in June, the lowest monthly outflow since ₹31,381 crore in December 2025, according to StockEdge. In February, they bought ₹12,950 crore of equities. “Easing oil prices on receding geopolitical tensions in West Asia led to the foreign sell-off abating to some extent,” said Riddhiman Jain, managing director and head of investment strategy and solutions, Waterfield Advisors.

Earnings on Watch
Jain said the slew of measures taken by RBI to support the rupee also caused the reduction. He said the rally in semiconductor and AI stocks in South Korea and Taiwan lost momentum in June as valuation concerns emerged.

Foreign investors had withdrawn more than Rs 1.15 lakh crore from Indian equities in March, the largest monthly outflow on record, following the February 28 outbreak of war, which pushed oil prices sharply higher.
Selling moderated in June after a tentative peace deal eased concerns and crude prices retreated, helping the Nifty gain 2.2%. Domestic institutional investors, meanwhile, bought shares worth Rs 76,156 crore in June, marking the 35th consecutive month of their monthly purchasing spree.
Analysts said the decline in oil prices has reduced one of the biggest headwinds for India, but sustained foreign inflows will depend on stronger earnings and economic growth.
“Until overseas investors continue to prefer other markets over India, and there is a slowdown in that rally, no major foreign inflows are expected,” said Siddarth Bhamre, head of institutional research at Asit C Mehta. “The impact on inflation is likely to subsidise but there has to be earning visibility, which is missing. Barring some small inflows, a revival in foreign sentiment is not expected.”

So far this year, foreigners have been net sellers to the tune of nearly Rs 2.90 lakh crore, the highest ever in a year, after pulling out Rs 2.39 lakh crore the previous year. The Nifty is down 8%.

“India can emerge as a good value story in this backdrop, especially while geopolitical clouds are waning. However, overseas flows tend to follow price momentum rather than lead it,” said Jain of Waterfield. “Once markets demonstrate sustained outperformance versus the past two years, that is typically when allocators rotate back into India.”

Domestic investors have remained resilient, although SIP inflows declined in May, signalling some fatigue after two to three years of muted returns. “SIP inflows for May also declined, indicating that some investors are losing patience,” said Bhamre.

Jain said global investors are likely to remain in wait-and-watch mode, with first quarter earnings serving as the key test. “While a runaway rally is not expected, the bias has turned positive,” he said. “After two to three years of tepid returns, there is some exhaustion that has set in among domestic investors, as reflected in the reduction in SIP inflows. While the flows have tapered, this is not a concern currently.”