Tuesday, January 15, 2019

PGCIL may get Maharatna status following Power Ministry’s recommendation: Report

THE power ministry has recommended Maharatna status for Power Grid Corp of India Ltd (PGCIL), the country’s largest power transmission company. Maharatna status allows state-run firms greater financial autonomy — they can decide on investments of up to 15 percent of their net worth in a project without government approval. In comparison, Navratna PSUs such as Power-Grid can invest only up to Rs 1,000 crore without government approval.
If the proposal is approved by the Centre, PGCIL will become the...
eighth Maharatna public sector undertaking — and the second in the power sector — after Bharat Heavy Electricals Ltd, Indian Oil Corp, Oil & Natural Gas Corp, Bharat Petroleum Corp, Coal India Ltd, NTPC Ltd and Steel Authority of India Ltd. PowerGrid had applied for Maharatna status after it achieved the qualifying parameter of average annual turnover of Rs 20,000 for three consecutive years.
The PSU’s consolidated net profit in 2017-18 was Rs 8,198 crore compared with Rs 7,451 crore in the previous year, while total consolidated income was Rs 30,431 crore against Rs 26,283 crore in 2016-17. In the last three years, its total income has grown at 20.05 percent, profit after tax at 18.28 percent and gross fixed assets at 14.41 percent. The company’s market capitalisation grew by 50 percent to cross Rs 1 lakh crore
The latest to join the select group of Maharatna PSU was Bharat Petroleum Corporation Limited (BPCL). The government conferred Maharatna status to the PSU in September 2017. Accordingly, BPCL is empowered to exercise the powers of a Maharatna company as governed by relevant guidelines issued by Department of Public Enterprises. Thus, the PSU has joined the select group of seven Central Public Sector Enterprises (CPSEs). Maharatna and Navaratna state-owned units operate in strategic fields such as coal, petroleum, steel, heavy engineering, power supply, telecommunications, and transportation services. Under government rules, a firm is eligible for Maharatna status if it is already a listed Navratna firm, has an average turnover, net worth an annual net profit after tax of at least Rs 25,000 crore, Rs 15,000 crore and Rs 5,000 crore, respectively, in the last three years. Moreover, the company should have significant global operations. After becoming a Maharatna firm, the board of PGCIL will get enhanced powers which will help in the the expansion of operations, both in India and abroad.
PGCIL is an electric utilities PSU headquartered in Gurugram. POWERGRID transmits about 50 percent of the total power generated in India on its transmission network. Its former subsidiary company, Power System Operation Corporation Limited (POSOCO) handles power management for Power Grid. POWERGRID also operates a telecom business under the name POWERTEL.
POWERGRID started functioning on management basis from August 1991 and subsequently it took over transmission assets from NTPC, NHPC, NEEPCO, NLC, NPC, THDC, SJVNL etc. in a phased manner and the Navratna PSU commenced commercial operation in 1992-93.
The CPSEs fulfilling the following criteria are eligible to be considered for grant of Maharatna status.
(i) Having Navratna status.
(ii) Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.
(iii) Average annual turnover of more than Rs. 25,000 crore, during the last 3 years.
(iv) Average annual net worth of more than Rs. 15,000 crore, during the last 3 years.
(v) Average annual net profit after tax of more than Rs. 5,000 crore, during the last 3 years.
(vi) Should have significant global presence/international operations.

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