The proposal to grant conditional Maharatna status to BHEL and GAIL will be taken to the Cabinet soon even as they do not meet the criteria at present, a top official said today.
The one-time exception is being considered to enable the two blue-chip PSUs to exploit investment opportunities up to Rs 5,000 crore without government approval, Secretary in the Department of Public Enterprises Bhaskar Chatterjee said.
While equipment firm BHEL and gas utility, GAIL, do not meet the financial parameters for the Maharatna status, they are expected to fulfill the criteria by the end of this fiscal.
However, since both these firms are cash rich and scouting for investment opportunities within and outside the country, they may be given the much sought-after status with a rider that they would achieve the required financial objectives in 2011-12.
"The Cabinet note is now ready... We are trying to say that these two companies in all likelihood will cross those parameters. It has gone to the minister (Minister for Heavy Industries and Public Enterprises Praful Patel) for his approval," Chatterjee told PTI.
But, the Secretary emphasised that it would be a one-time relaxation for these firms and the Maharatna guidelines would not be diluted.
At present, BHEL and GAIL are Navratna companies.
In 2010-11, BHEL reported a net profit of Rs 6,011 crore on a turnover of Rs 43,451 crore. The entity's net worth in the last fiscal stood at Rs 20,119 crore.
While GAIL reported a net profit of about Rs 3,561 crore, turnover of about Rs 32,977 crore and net worth of Rs 20,310 crore in the 2010-11 fiscal.
A company qualifying for the Maharatna status should have an average annual turnover of more than Rs 25,000 crore in the last three years, according to the guidelines.
Among others, the PSU must also have a net worth of over Rs 15,000 crore and net profit of above Rs 5,000 crore, in the last three years.
On March 17 this year, the DPE had relaxed norms for according the Maharatna status to PSUs.
However, easing of norms were denotified within a month as it required the Cabinet approval.
Once a company gets the Maharatna status, its board would not be required to take the government's permission for investments up to Rs 5,000 crore in a joint venture project or wholly-owned subsidiary. For the Navratna companies, the limit is Rs 1,000 crore.
