New Delhi, Aug. 20 -- The proposed merger of Power Finance Corporation (PFC) and REC may offer some revenue benefits through greater scale and reduced competition, but cost savings from the deal could remain limited, according to a Morgan Stanley report.

The companies have announced a merger under which REC shareholders will receive 88 shares of PFC for every 100 shares of REC. PFC expects to complete the merger with REC by April 1, 2027, subject to the required regulatory approvals.

Morgan Stanley said it sees limited scope for cost savings from the merger because both companies already have low operating costs. At the same time, the brokerage said the combined entity could see some revenue benefits due to its larger scale and the remo...