India - BSNL may get Navaratna tag before IPO

The government may confer navratna status to Bharat Sanchar Nigam (BSNL) before the telecom major hits the market with its initial public offer.It would consider a proposal to designate BSNL and Coal India as navratna companies in its upcoming meeting this week. It will also consider the case of Rashtriya Ispat Nigam (RINL) for the navratna tag. The Department of Public Enterprises (DPE) has asked these companies to furnish financial details and the number of independent directors on their board. While BSNL has been trying for the navratna status since 2001, Coal India and RINL joined the fray recently. Currently, there are 17 central public sector enterprises which have been granted the navratna tag. The list includes Shipping Corporation of India, Bharat Heavy Electricals, Steel Authority of India and Indian Oil Corporation. “Both BSNL and Coal India have initial public offer (IPO) plans. If these companies have the navratna status before their issues hit the market, they may be able to generate a better response. Both PSEs have earlier applied, so we hope that this time their proposal should be cleared. We’ve also asked RINL to furnish all details,” a DPE official said. BSNL, a mini-ratna, has been pushing for navratna tag on grounds that it has performed better than other CPSEs, while smaller companies like Mahanagar Telephone Nigam (MTNL) were granted navratna status much earlier. BSNL posted a net profit of Rs 7,805 crore on revenues of Rs 39,715 crore in 2006-07. It also invested Rs 8,142 crore for expansion of its telecom network during the year and plans to raise around Rs 40,000 crore from its public offer. Coal India, which is also a mini-ratna, hopes to further the plans of its foreign venture arm, Coal Videsh. The company posted a net profit of Rs 2,822 crore in the last financial year.