BSNL, NALCO and SCI are set to become Navratnas. These might be good long-term stories.
We advise clients to pick up & accumulate these stocks on dips over the next few months.
These are presently slightly overvalued.
NATALU – icici Nalco code.
SCI – Shipping Corp India.
Navratna stock set to double
Sushma Kindo
New Delhi, Aug 22 The government is looking at adding nine more jewels to its stock of navratnas. “We are considering the applications of nine PSUs for grant of navratna status,” minister for heavy industries, Sontosh Mohan Dev told FE.
Telecom giant Bharat Sanchar Nigam Ltd (BSNL), National Aluminium Corporation, National Hydroelectric Power Corporation, Power Finance Corporation, Rural Electrification Corporation, Hindustan Aeronautics Ltd, Power Grid Corporation and Shipping Corporation of India are eight of the nine PSUs in the reckoning. Of these, SCI and Nalco are listed entities.
Navratna is not just a status symbol for a public sector undertaking. It cuts the red tape and gives PSUs significant financial and operational autonomy.
If granted navratna status, SCI or any PSU in the the new batch of nine, can invest up to Rs 1,000 crore or 15% of its networth in joint ventures and subsidiaries without waiting for government permission. Their boards will also be empowered make acquisitions worth up to Rs 1,000 crore.
Officials in the department of public enterprises (DPE) said a number of PSUs had applied for miniratna status as well to their respective administrative ministries. These would be considered only after they were cleared by the ministries.
The government had enhanced the financial and operational autonomy of PSUs in August 2005 after the Cabinet agreed to some of the recommendations of an ad-hoc group of experts on PSU autonomy headed by Arjun Sengupta. After corporatisation of the government’s telecom operations into BSNL five years ago, the company has consistently pitched for navratna status.
In 1997, the government had identified nine PSUs that had comparative advantages and the potential to emerge as global giants. These were BHEL, BPCL, GAIL, HPCL, IOC, MTNL, NTPC, ONGC and SAIL.
