Heavy Industries Minister Praful Patel today said BHEL is likely the next candidate to get the coveted Maharatna tag, a move that will provide more financial flexibility to the state-run power equipment manufacturer.
“One of the companies which can qualify for Maharatna status in the near future is BHEL...,” Mr. Patel told reporters on the sidelines of a AIMA event here.
At present, there are four Maharatnas - ONGC, Indian Oil, SAIL and NTPC.
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A PSU with Maharatna status can invest up to Rs 5,000 crore in a project independently, while the limit for Navratna companies is Rs 1,000 crore.
For getting Maharatna status, a company needs to have a three-year track record of annual net profit of over Rs 5,000 crore, net worth of more than Rs 15,000 crore and turnover of more than Rs 25,000 crore. It should also be a listed firm.
“It (to accord Maharatna status to BHEL) is being examined and will be done shortly. BHEL is likely to fulfil that criteria soon,” Mr. Patel added.
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BHEL’s turnover was Rs 33,173.34 crore in the fiscal 2009-10. However, the company’s annual average net profit was Rs 3,433 crore during the last three years.
Its shares were trading at Rs 2192.5, down 0.05 per cent from the last close at the Bombay Stock Exchange.
Maharatna scheme was announced by the government in December 2009 to give more operational freedom to the top-performing PSUs.
When that several PSUs lack the required number of independent directors on their board, Mr. Patel said the positions would be filled up soon.
“Many PSUs have independent director vacancies. The independent director position has to be fulfilled at the earliest and Department of Public Enterprises will make sure that all the position has eminent people,” he added.
As per the Clause 49 of the listing agreement between companies and stock exchanges requires companies to have independent directors in half of the board positions.
Some large listed state-run companies do not have the required number of independent directors.
This has impeded the government’s effort to divest part of its stake in public sector firms, forcing it to name retired bureaucrats as independent directors.
Out of 47 listed government companies, the boards of 17 companies like Indian Oil, BHEL and SAIL do not have the required number of independent directors,” a recent government report had said.
There are 246 Central Public Sector Enterprises in the country, as on March 2009.