REC Ltd, a power sector focussed NBFC that comes under the aegis of the Power Ministry, has been accorded the status of ‘Maharatna’ central public sector enterprise (CPSE). With this, it will achieve greater operational and financial autonomy. The company’s shares are trading at ₹ 101.40 levels in a weak market.
The Maharatna status will enhance the powers of the company’s board while taking financial decisions, as per the company’s statement. It 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 percent of the net worth of the CPSE concerned, limited to ₹ 5,000 crore in one project.
Further, it can structure and implement schemes relating to personnel and human resource management and training. REC Ltd can also enter into technology joint ventures or other strategic alliances among others.
For a company to be categorized as a Maharatna, it should be listed on an India Stock Exchange, and have an average annual turnover of ₹ 25,000 crores during three previous years. Further, it should have an average annual net worth during the previous three years of more than ₹15,000 crore and an average net profit of over ₹ 5,000 crore during the same period.
This development has come at a time when the Centre is also considering granting the status of a development finance institution (DFI) to REC Ltd to enable the state-run company to steer global climate funding and net zero investment in the country.
“In FY22, REC made its highest ever net profit of Rs 10,046 crore and reached a net worth of Rs 50,986 crore, owing to its cost-effective resource management and strong financial policies,” said Vivek Kumar Dewangan, the Chairman and Managing Director of REC.
REC has become the 12th Maharatna. The other eleven Maharatnas are Power Finance Corporation, 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. In addition India has 13 Navratnas and 74 Miniratna CPSEs.
REC Ltd. provides financial assistance to state electricity boards, state governments, central and state power utilities, independent power producers, rural electric cooperatives and private sector utilities.
Written by Simran Bafna
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