Power Finance Corp. Ltd (PFC) is set to become the 11th Maharatna central public sector enterprise (CPSE), with an inter-ministerial committee clearing the Navratna last week for this, said two people aware of the development.
This comes against the backdrop of the government using power sector lenders such as PFC and REC Ltd to instil financial discipline at state-owned electricity distribution companies (discoms).
The Maharatna dispensation was ushered in by the Union government for mega CPSEs to become global giants. PFC, India’s largest non-banking financial company (NBFC) and among the 14 Navratna CPSEs, can invest up to ₹5,000 crore, or 15% of its net worth, in a single project apart from being granted enhanced powers by the government for undertaking mergers and acquisitions once it gets the Maharatna status. Navratna and Miniratna CPSEs can invest up to ₹1,000 crore and ₹500 crore, respectively.
“The inter-ministerial committee has cleared PFC for Maharatna status. The official notification is expected to be issued in about 10 days,” said one of the two people mentioned above, requesting anonymity.
The buyout of the government’s entire stake in REC Ltd by PFC in 2019 cleared the decks for the $80 billion lending institution.