For selloff shine, Miniratnas set for 5-star rating

NEW DELHI: A slew of state-run companies may be accorded navratna status, making them financially more autonomous, as the government looks to generate more investor interest before they get listed.

National Hydro Power Corporation (NHPC), MMTC, Bharat Sanchar Nigam (BSNL) and Oil India Corporation (OIC)-all currently classified a notch below as miniratnas-are some of the firms that may be upgraded, said an official in the department of public enterprises (DPE) asking not to be named.

"We will make sure that these miniratna companies comply with all required regulatory guidelines before they are conferred the navratna status," the official said.

As per existing rules, the navratna status is subject to the condition that these public sector enterprises (PSEs) shall not depend upon budgetary support or government guarantee.

A BSNL official, on condition of anonymity, said the move will increase investor confidence as the boards of directors of navratnas are authorised to approve mergers and acquisitions. "This may be a good decision in hindsight," he said.

According to an official estimate, a sale of 5% government stake in MMTC alone is expected to bring in about Rs 5,000 crore. Similarly, a 5% equity divestment in Bharat Electronics (BEL) and Shipping Corporation of India (SCI) could fetch the government Rs 500 crore and Rs 300 crore respectively.

The Board for Reconstruction of Public Sector Enterprises (BRPSE) also favours the central PSEs getting listed on the stock exchange as this would help the board in knowing the real value of the company and deciding which company may be capable of taking over sick units.

Most of the PSUs that are currently listed hold navratna status.

The government is also dusting up a proposal to upgrade some of the blue-chip companies such as Gail, NTPC, ONGC, BHEL, Sail and Indian Oil Corporation (IOC) to 'maha navratna', a category above navratnas. "We want every profitable PSU to be listed on the stock exchange," the DPE official said.

Earlier, various PSUs had received show-cause notices from stock market regulator SEBI for penalty and adjudication proceedings for non-compliance with the Clause 49 of the listing agreement. As per the clause, companies need to have 50% independent directors on their boards.