Shares of REC Ltd ended at Rs 103.65, up Rs 0.75, or 0.73% on BSE. Incorporated in 1969, REC is an NBFC focused on the financing and development of the power sector in India.
State-owned REC Ltd said on Thursday that the government had granted it “Maharatna” Central Public Sector Enterprise (CPSE) status, giving it greater operational and financial autonomy.
REC is the 12th company to achieve Maharatna status.
“An order to this effect was issued today by the Department of Public Enterprises, under the Ministry of Finance,” the company said in a Sept. 22 statement.
Incorporated in 1969, REC is an NBFC focused on the financing and development of the power sector in India. Granting REC Maharatna status will give the company’s board of directors greater powers in making financial decisions.
The board of a Maharatna CPSE may make equity investments for financial joint ventures and wholly owned subsidiaries and undertake mergers and acquisitions in India and abroad, subject to a cap of 15% of the net worth of the relevant CPSE, limited to Rs 75,000 crore in one project.
The council may also structure and implement programs relating to the management and training of personnel and human resources. With this, REC may also enter into technology joint ventures or other strategic alliances, among others.
Vivek Kumar Dewangan, CMD, said REC has achieved this feat through its adaptability, resilience and consistent performance even during the global COVID-19 pandemic.
“In FY22, REC achieved its highest ever net profit of Rs 710,046 crore and reached a net worth of Rs 750,986 crore, thanks to its cost effective management of resources and strong financial policies “, he added.
To be eligible for the grant of Maharatna status, the business must have an average annual turnover of more than Rs 25,000 crore, an average annual net worth of more than Rs 15,000 crore and an average annual net profit of more than Rs 5,000 crore in the last three years.
The Maharatna program aims to empower the boards of directors of identified large CPSEs to facilitate the expansion of their operations, both in domestic and global markets.
Among other things, Maharatna status allows companies “to incur capital expenditure for the purchase of new items or for replacement, without any monetary ceiling”. Furthermore, these CPSEs should not be dependent on budgetary support or government guarantees.
(Edited by : Shoma Bhattacharjee)