Investors’ luck will shine due to mega-merger of government companies! Know how shareholders will get huge profits and what new investors should do. Mega-merger of state-owned companies set to boost investors’ fortunes! Find out how shareholders stand to make huge profits and what new investors should do. – ..

The news of the merger of two giant public sector financial companies, Power Finance Corporation (PFC) and REC Limited (REC), has created a stir in the Indian stock market and Dalal Street. The merger of these two big companies that finance the country’s power sector will not only strengthen the energy sector, but will also have a direct impact on the shareholders of these companies. If you also include these two stocks in your portfolio, then this historic merger can have a big and positive impact on the value of your investments.

Why is this merger beneficial for existing shareholders?

Existing investors are going to get many big benefits from this mega-merger. With the merger of both the companies, there will be a huge reduction in operational costs and there will be a tremendous increase in the ability to raise funds. There will be no internal competition in the matter of giving loans in the power sector, which will improve the profit margin of the company. Experts believe that the balance sheet of the new entity formed after this merger will be very strong, which will directly benefit the shareholders in the future in the form of strong dividends and long-term growth in share prices (Capital Appreciation).

What is the strategy of market experts for new investors?

Market experts have given special advice for investors who are thinking of making a new entry in PFC or REC shares. According to experts, since both the companies are fundamentally strong and their dividend yield is also excellent, it would be best to adopt the strategy of ‘buy on dips’ (buy on every dip) in view of this merger. Considering the increasing demand of power sector and infrastructure development, this new consolidated stock can prove to be a multibagger in the coming times. New investors can add it gradually to their portfolio with a long-term perspective.

After the merger, all eyes were on share swap ratio.

The most important thing for existing investors in this entire merger process will be the ‘Share Swap Ratio’. That is, the official announcement of how many shares of PFC investors will get in exchange for REC is yet to be made. Market analysts estimate that this ratio will be decided on the basis of current market cap and book value of both the companies, which can prove to be very beneficial for the retail investors of both the companies. During this merger process, the business operations of both the companies will continue to run smoothly as before.