In a first of sorts, the four PSU contenders for the coveted Maharatna status have been asked to present their case to the government. This is quite a departure from the existing process, where the department of public enterprises decides on giving more autonomy or Navratna status to eligible public sector companies.
According to official sources, three PSUs ? Indian Oil Corporation (IOC), NTPC and Steel Authority of India Ltd (SAIL) ? have already made presentations before an inter-ministerial committee (IMC) on why they deserve the title. Upstream oil major ONGC is also expected to make a pitch before the high-level committee on Monday. IOC was not in the original list of aspirants.
Senior officials from the department of expenditure, department of public enterprises, Planning Commission as well as the administrative ministries are represented on the IMC.
Maharatna status will provide enhanced financial autonomy for PSUs for taking decisions relating to investments in joint venture companies and mergers and acquisitions. It is meant to help PSUs with a significant international presence to become global giants. Maharatna status will be reviewed by an apex committee headed by the Cabinet Secretary.
Significantly, all four companies have increased their international presence in recent years. While ONGC and IOC are looking for opportunities abroad to acquire oil and gas assets, NTPC and SAIL are hunting for captive coal blocks in foreign lands.
ONGC has seen serious constraints in financing OVL?s acquisitions of oil and gas assets abroad because of investment ceilings. As a Navratna company, ONGC?s investment in any OVL project cannot exceed Rs 1,000 crore. But the Maharatna status will raise this limit to Rs 5,000 crore.
As per the earlier programme, ONGC?s case was to be taken up by the committee first. But that could not happen due to non-availability of the ONGC chairman and senior officials of the petroleum ministry. So, the presentation was rescheduled for April 5. Each applicant has to convince the IMC that it has indeed a strong case for grant of Maharatna status and that it is not seeking the tag just because it meets the minimum criteria laid by the government.
For example, IMC can ask the applicant what it would do if it is granted the Maharatna status. Besides, the applicant will also be quizzed about how it utilised the Navratna status.
As per the criteria set by the government, a Navratna PSU applying for Maharatna status should be listed on stock exchange. It should also have average turnover of more than Rs 25,000 crore during the last three years, networth of more than Rs 15,000 crore and net profit over Rs 5,000 crore during past three financial years. Besides, it should have significant global presence.