As a specialized non-banking financial company operating primarily in infrastructure and power sector lending, REC Ltd relies heavily on debt borrowing from domestic and international capital markets to fund its large-scale loan disbursements. Consequently, its debt-to-equity ratio is naturally higher than traditional corporate enterprises, reflecting standard operational leverage for a wholesale financing institution. Financial regulators and rating agencies closely monitor this metric to ensure the company maintains adequate capitalization, liquidity buffers, and manageable risk profiles.