The Finance Ministry on Thursday upgraded two oil sector companies, Oil India and ONGC Videsh, to Maharatna and Navratna categories of central public sector enterprises (CPSEs), respectively. The new status will help the companies take decisions on large investments on their own, both within India and abroad.

Oil India was earlier a Navratna company, while ONGC Videsh was a Miniratna CPSE. In a tweet, the Public Enterprises Department (DPE) under the Finance Ministry said: “The finance minister approved upgradation of Oil India Ltd (OIL) to Maharatna CPSE. OIL will be the 13th Maharatna amongst the CPSEs.”

OIL is an Oil Ministry CPSE with annual turnover of Rs 41,039 crores and net profit of Rs 9,854 crores for the fiscal year 2022-23.

OIL is a fully integrated exploration and production company in the upstream sector, with its origins dating back to 1889 — the year of oil discovery in India. The state-owned enterprise is under the administrative control of the Ministry of Petroleum and Natural Gas and is the second largest national oil and gas company in India.

Oil India Private Limited was incorporated on February 18, 1959, to expand and develop the newly discovered oilfields of Naharkatiya and Moran in the north-eastern region of India. In 1961, it became a joint venture company of Government of India and Burmah Oil Company Limited, UK. In 1981, OIL became a wholly owned Government of India enterprise.

The Maharatna scheme was introduced for CPSEs, with effect from May 19, 2010, in order to empower them to expand operations and emerge as global giants. Some of the important CPSEs are BHEL, Indian Oil, ONGC, Indian Oil, BPCL, HPCL and SAILs.

CPSEs fulfilling the following criteria may be considered for Maharatna status: Holding Navratna status; listed on the Indian stock exchange, with a minimum prescribed public shareholding under SEBI regulations; an average annual net profit exceeding  Rs 2,500 crore during the last three years; and significant global presence or international operations.

ONGC status upgrade

In another tweet, DPE said: “The finance minister has approved the upgradation of ONGC Videsh Ltd (OVL) to Navratna CPSE. OVL will be 14th Navratna amongst the CPSEs.” It is an Oil Ministry CPSE with annual turnover of Rs 11,676 crore and net profit of Rs 1,700 crore for FY 2022-23.

A Navratna CPSE can incur capital expenditure, without any monetary ceiling, on the purchase of new items or for replacement. It can enter into technology joint ventures or strategic alliances. It can obtain, through purchase or other arrangements, technology and knowhow. It can raise debt from the domestic capital markets and international market, subject to the approval of RBI/Department of Economic Affairs. It can establish financial joint ventures and wholly owned subsidiaries in India or abroad within an investment ceiling of Rs 1,000 crore.