Power sector-focussed non-banking finance company (NBFC) REC Ltd. has been accorded the status of a ‘Maharatna’ Central Public Sector Enterprise, thus providing it with greater operational and financial autonomy. The granting of ‘Maharatna’ status will impart enhanced powers to the company’s board while taking financial decisions. REC Ltd. is the 12th company to be given the Maharatna Status.
The board of a ‘Maharatna’ CPSE can make equity investments to undertake financial joint ventures and wholly-owned subsidiaries and undertake mergers and acquisitions in India and abroad, subject to a ceiling of 15 per cent of the net worth of the CPSE concerned, limited to ₹5,000 crores in one project. The board can also structure and implement schemes relating to personnel and human resource management and training.
REC has played a key role in the success of the flagship schemes of the Government of India such as Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and SAUBHAGYA and has contributed towards achieving village and household electrification in the country. REC is currently playing the role of nodal agency for Revamped Distribution Sector Scheme (RDSS), for revamping the distribution sector to alleviate the financial & operational issues.
What is Maharatna’s Status?
Introduced in 2010, the Maharatna status is given to the Central Public Sector Enterprises (CPSE) by the Central Government to make these enterprises global giants. This status is granted to CPSE which recorded more than Rs. 5,000 crores of net profit for three consecutive years, an average annual turnover of Rs.25,000 crore for three years and recording an average net worth of Rs.15,000 crore for three years. It should also have a footing in the international market and be listed on an Indian stock exchange.
About the REC Ltd:
Incorporated in 1969, REC focuses on power sector financing and development across India. It provides financial assistance to state electricity boards, state governments, central/state power utilities, independent power producers, rural electric cooperatives and private sector utilities. REC Limited, formerly Rural Electrification Corporation Limited, is a public Infrastructure Finance Company in India’s power sector. The company is a Public Sector Undertaking and finances and promotes power projects across India. It was earlier known as Rural Electrification Corporation.