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News Update: Chances of ‘Maharatna’ tag make NTPC brighter for investors
Amid its plans to hit the capital market with the follow-on public offer next week, power major NTPC is likely to get the coveted status of ‘Maharatna’, which will give it more financial and operating freedom.
Once a PSU gets the ‘Maharatna’ status, it will have more autonomy and can take investment decisions for up to Rs 5,000 crore without the government approval against the present limit of Rs 1,000 crore.
Many believe NTPC’s bright chances of getting the ’Maharatna’ status, would attract investors’ attention. The government is also planning the French auction route for the FPO. Under the French auction route, the highest bidder under the institutional cat egory (QIB) will be allotted shares.
The government is planning to divest its 5 per cent stake in NTPC through FPO. The divestment is expected to bring in nearly Rs 10,000 crore to the exchequer going by the current market value of the company.
The Secretary in the Department of Public Enterprises, Mr Bhaskar Chatterjee had recently said, “We hope to confer the Maharatna status in about 10 days... as of now four PSUs appear to be there.” NTPC, IOC, ONGC and SAIL are the four vying for the tag.
Of the 18 Navratnas companies SAIL, ONGC, NTPC and IOC meet the stiff criterion, including a three-year track record of annual net profit of Rs 5,000 crore, net worth of Rs 15,000 crore and turnover of Rs 25,000 crore, besides being listed on the bourses .
At present, top PSUs are accorded the Navratna status and there is no Maharatna status.
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