The government plans to sell its stake in Rural Electrification Corporation to Power Finance Corporation at a premium, which could fetch about Rs 15,000 crore to the exchequer.

PFC would acquire the 52.63 per cent government stake in REC in a merger deal which is likely to fetch the exchequer around Rs 15,000 crore and help the government meet its Rs 80,000-crore divestment target for the current fiscal ending March.

The REC share closed at Rs 132.80 apiece on the BSE on Friday.

Sources indicated that the government would be selling its stake at a premium of about 15-20 per cent, which would enable it to meet the stake sale target.

Analysts pointed out that the government stake in HPCL was sold to ONGC last year at a 14 per cent premium and the deal had helped the exchequer mobilise Rs 36,915 crore and exceed the divestment target last fiscal.

Power Finance Corporation is likely to dip into its reserves to help the government with the much needed revenue. The government has fallen short on the revenue front on account of lower GST tax collections even as its expenses have mounted.

PFC, industry sources said, could be financing about Rs 10,000-Rs 12,000 crore for the acquisition of stake though its “reserves and surplus” and the remaining sum though a debt instrument.

Data showed that PFC at the end of the last fiscal had reserves and surplus of Rs 37,220.59 crore.

The company has already received approvals for the deal from the RBI, market regulator Sebi and the Competition Commission of India.

The board of the power financing firm has called an extraordinary general meeting of the shareholders on March 19 to approve the planned takeover of REC.

The agenda includes authorising the board to negotiate and finalise the share purchase agreement, fixing the price, quantum, the premium and the terms of payment for giving effect to the merger.

“This decision (merger) will enable increased efficiencies in lending processes and policies across both the institutions and would create substantial public value by offering better loan products to the sector,” the company said.

The government’s divestment proceeds have touched Rs 53,558 crore so far in the current fiscal against the full-year budget target of Rs 80,000 crore.