New Delhi, Feb. 13 -- The potential merger of Power Finance Corporation Ltd (PFC) and REC Ltd (formerly Rural Electrification Corporation Ltd) returned to the headlines when the finance minister revived the topic during her Union Budget speech on 1 February. The promise of a larger and more efficient renewable-energy financing company enthused investors, causing PFC stock to jump more than 9%.

Following this, the boards of PFC and REC quickly approved the merger in principle on 6 February. Interestingly, this prompted profit-booking, with PFC stock down about 1% since then. REC investors have been sceptical right off the bat, with the stock correcting almost 3% since the Budget.

The mixed sentiment follows an about 40% correction in bot...