Chances of 'Maharatna' tag makes NTPC brighter for investors
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Chances of 'Maharatna' tag makes NTPC brighter for investors

Last Updated: Sunday, January 31, 2010, 16:40
 
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Chances of 'Maharatna' tag makes NTPC brighter for investors
New Delhi: 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 Frech auction route for the FPO. Under the French auction route, the highest bidder under the institutional category (QIB) will be allotted shares.

The government is planning to divest its 5 percent 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. Secretary in the Department of Public Enterprises 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. Steel major SAIL, another candidate for 'Maharatna' status, is also expected to hit the capital market in the next financial year in pursuance of the government's disinvestment programme of the government under which profit-making PSUs will be required to go public and offload at least 10 percent equity.
In January, the government had said 60 state-owned companies are likely to hit the capital market in the next couple of years, with steel giant SAIL and coal major CIL coming out with IPOs in the next fiscal itself. PTI


First Published: Sunday, January 31, 2010, 16:40


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