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NEW DELHI : Power Finance Corp. Ltd (PFC) was accorded the status of Maharatna central public sector enterprise (CPSE) on Tuesday, giving the state-run firm greater operational and financial autonomy.

Mint earlier reported about India’s largest power sector company set to become a Maharatna after a clearance from an inter-ministerial committee. The other 10 Maharatna CPSEs at present are Bharat Heavy Electricals Ltd, Bharat Petroleum Corp. Ltd, Coal India Ltd, GAIL (India) Ltd, Hindustan Petroleum Corp. Ltd, Indian Oil Corp. Ltd, NTPC Ltd, Oil & Natural Gas Corp. Ltd, Power Grid Corp. of India Ltd, and Steel Authority of India Ltd. There are 14 Navratna and 73 Miniratna CPSEs.

PFC can now invest up to 5,000 crore, or 15% of its net worth, in a single project after its Maharatna status.

“The grant of ‘Maharatna’ status to PFC will impart enhanced powers to the PFC board while taking financial decisions," PFC said in a statement on Tuesday. “The board of a ‘Maharatna’ CPSE can make equity investments to undertake financial joint ventures and wholly owned subsidiaries and undertake mergers and acquisitions in India and abroad, subject to a ceiling of 15% of the net worth of the concerned CPSE, limited to 5,000 crore in one project."

The decision comes against the backdrop of the government using power sector lenders such as PFC and REC Ltd to instil financial discipline at state-owned electricity distribution companies (discoms).

The Maharatna dispensation was ushered in by the Union government for mega CPSEs to become global giants. Navratna and Miniratna CPSEs can invest up to 1,000 crore and 500 crore, respectively.

 

 

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