B M Bansal, Chairman, IndianOil receives the Maharatna certificate from Union Minister for Heavy Industries & Public Enterprises Vilasrao Deshmukh at a function
The government has formally conferred `Maharatna' status to flagship explorer ONGC, refiner-marketer IndianOil, steelmaker SAIL and generation utility NTPC. The move will substantially enhance their autonomy and operational flexibility as well as act as a booster for the first three firms when they shortly approach the market for a further stake sale.
Conferring the Maharatna certificates, heavy industry minister Vilasrao Deshmukh stressed the need for a robust public sector and specially mentioned ONGC as an example for others to emulate. "Best practices of ONGC and ONGC Videsh are worth emulating by others," he remarked while handing over the certificates to company chiefs.
The Maharatna status will allow these entities to decide on investments up to Rs. 5,000 crore in one project, while as Navaratnas they could do so for Rs. 1,000 crore. The Maharatna status is granted to listed Navaratna companies with an average annual turnover of more than Rs. 25,000 crore, net profit of Rs. 5,000 crore and a net worth of Rs. 15,000 crore during the past three years.
IndianOil, ONGC and SAIL are slated to make follow-on offers shortly. Analysts said the enhanced autonomy would boost investor sentiment, though in case of the oil companies losses on fuel sales and absence of a transparent subsidy-sharing mechanism remain dampeners. The analysts also said greater operational flexibility will allow these companies to become worldclass and compete in the international arena.