The government held 57.99 per cent in REC and 65.64 per cent in PFC at September-end.
At the current market price of Rs 105.10 a share, the sale of 52.63 per cent government holding in REC will fetch around Rs 11,000 crore.
The government hopes that acquisition will create a larger entity with an enhanced balance sheet and provide higher value loans as well as remove duplication of work.
REC shares closed 1.22 per cent down on the BSE, while PFC slipped 5.33 per cent to Rs 92.30.
At the end of 2017-18, the total resources of REC stood at over Rs 2.46 lakh crore, of which reserves were Rs 33,515.59 crore. The net worth of the company was Rs 35,490 crore and 'cash and bank balance' was Rs 1,773 crore at the end of March 2018.
The deal, if it goes through, will help the government scale up its disinvestment proceeds. So far over Rs. 32,000 crore has come into the disinvestment kitty from a minority share sale in CPSEs and follow-on offer of exchange-traded funds -- CPSE ETF and Bharat-22.
The budgeted target from PSU disinvestment is Rs 80,000 crore.
The REC-PFC deal is being considered on the lines of the acquisition of the government's entire 51.11 per cent stake in oil refiner HPCL by state-owned ONGC in 2017-18. The government bagged Rs 36,915 crore from the stake sale.
Finance Minister Arun Jaitley had in the budget for 2017-18 said there were opportunities to strengthen CPSEs through consolidation, mergers and acquisitions.
"By these methods, CPSEs can be integrated across the value chain of an industry. It will give them the capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders," he had said.
(With inputs from agencies.)