Dun & Bradstreet India's Top PSUs 2018

India’s Top PSUs 2018 Published in India by Dun & Bradstreet Information Services India Pvt Ltd.

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Preeta Misra Naina Acharya


Editorial Team

Omesh Kandalkar, Yogesh Jambhale, Mihir Shah, Christopher D’Souza, Pooja Wadhwa, Rohit Pawar, Nishikant Sharma Suhail Aboli, Jaison Swamidas, Rajesh Kandari, Prasad Kachraj, Sukhvinder Singh, Romita Dey Talukdar, Subhonita Gargari, Dharmesh Kapoor, Apoorwa Tyagi, Sohail Chawla, Amit Kumar, Sonal Singh Rana, Siddarth Ravindran, Miloni Shah, Apeksha Mutreja, Rohit Sharma, Manjula Dinakaran, Pranava Rao, Taran Chawla, Pooja Arora, Nalini Kukreti Mangesh Shinde, Nehal Khosla, Sumit Sakhrani, Ankur Singh, Rajesh Gupta, Melita Menezes, Smruti Gandhi, Tia Roy, Nikita Sachdev, Rehan Shah, Ankita Satam, Anoop Parwani, Nadeem Ansari

Sales Team

Operations Team

Design Team

Mohan Chilvery, Sonal Gangnaik, Tushar Awate, Shilpa Chandolikar, Sunil Burli

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India’s Top PSUs 2018 11 th Edition ISBN 978-93-86214-27-0

Contents Preface.................................................................................................................. I Foreword............................................................................................................. III Executive Summary..............................................................................................V Methodology. ....................................................................................................VII Definitions & Calculations................................................................................... IX PSU Overview.................................................................................................... XIII Experts’ View. ...........................................................................................E-1 - E-8 Listings Complete List of Central PSUs........................................................... L1 - L11 State PSUs........................................................................................ L13 - L41 List of Maharatnas, Miniratnas & Navratnas............................................ L43 Listings of Profiled Central PSUs...................................................... L45 - L51 Profiles of Top PSUs of India Non - Financial Segment........................................................................1 - 59 Banks...................................................................................................61 - 67 FIs/NBFCs.............................................................................................69 - 73 Insurance.............................................................................................75 - 78 Abbreviations.............................................................................................. 83 - 91 Index. .......................................................................................................... 93 - 96


Dun & Bradstreet India is pleased to present the 2018 edition of its publication, ‘ India’s Top PSUs ’. The publication is an insightful compendium of India’s leading Public Sector Undertakings (PSUs) and profiles 177 PSUs. The PSUs with a total income of ` 1 billion and above have been profiled in the present publication. It also presents a comparison of financial parameters of companies within their respective sectors. No discussion on PSUs can be complete without a discussion on capitalism. Capitalism has been an engine of wealth creation for several decades and has led to sustained productivity gains and long-term growth. However, capitalism has taken slightly different forms in different countries. In some countries capitalism has created disparities between the rich and the poor, disregarded environment and its impact on social well-being. Recently, various research has been conducted to determine how capitalism should be reformed in the long run which would be

more ‘responsible’ and sustainable in generating long-term value. This form of responsible capitalism in some essence has been followed by some countries over the years. Their achievement is underlined by long term view on investment, as well as their performance in various indicators of economic and social well-being where they are front-runners. These countries are among the most income-equal countries in the world, they score high on competitiveness index, human development index and people satisfaction indicated by the happiness index. The best known examples of these type of countries are Sweden, Denmark, Iceland, Norway and Finland. In the Indian context, we find that many of the positives recommended in the holistic models of capitalism are embedded in the objective on which the PSUs were created in India after independence. PSUs have been set up to bring self-reliant and sustainable economic growth with a social perspective, create balanced regional development and promote redistribution of income/wealth. PSUs while contributing to the economic growth of the nation are also engaged in social value creation. More recently, their role has been extended to upholding the Micro and Small Enterprises (MSEs) by improving their market access and creating a level playing field through procuring goods and services from them. PSUs are thus delivering socially desirable outcomes despite various constraints such as availability of talent pool, government participation, financial hurdles etc. ‘ India’s Top PSUs 2018 ’ is an endeavour to capture the essence of the contribution of the PSUs to the India economy. It attempts to provide leading players with the unique advantage of Dun & Bradstreet’s global footprint in disseminating vital and useful information about them to a wider audience. I hope you enjoy reading this issue of ‘ India’s Top PSUs 2018 ’ and look forward to your comments and suggestions.

Manish Sinha Managing Director – India Dun & Bradstreet




Dun & Bradstreet is pleased to announce the release of the eleventh edition of its premier publication, ‘ India’s Top PSUs ’. The publication has consistently served as compendium on the financial performance of Indian public sector undertakings (PSUs). Dun & Bradstreet’s global footprint and market reach will ensure that the publication receives international exposure as a premier resource on the Indian public sector undertakings. The year 2017 was favourable for the global economy. The major fears – a market crash due to US presidential elections, recession in the UK due to Brexit and a possibility of collapse of the eurozone due to disintegration of the Italian banking system – have failed to materialise. The global economic story of 2017 has largely been positive and was witnessed through rising stock indices.

Against this backdrop, the Indian economy has continued to exhibit growth prospects on the back of strong economic fundamentals. Over the past few years, the Indian economy has undergone a paradigm shift and India has successfully positioned itself as the most dynamics emerging economy. Further, it is expected to remain the fastest growing economy on the back of robust private consumption, strong domestic demand, and significant domestic reforms which are gradually being implemented by the government. The World Bank has projected the Indian economy to grow by 7.3% in CY18 and 7.5% in CY19. The Indian public sector undertakings (PSUs) have significantly contributed to the country’s economic resurgence. However, challenges related to productivity and efficiency pose major barriers to their growth. In an increasingly technology driven environment, these companies need to adopt technology solutions that not only enable them to align their organisation’s business needs but also help them achieve growth and efficiencies. To achieve competitive advantage, PSUs need to leverage emerging technologies and best practices. They also need to adopt innovative ways of analysing data and tracking business performance, in order to take their enterprises to the next level of growth. Dun & Bradstreet believes that PSUs with their extensive pan-India presence support the government in the implementation of their programs and initiatives. Without the support of PSUs, achieving the targeted growth would be a herculean task. Therefore, monitoring the performance of PSUs becomes significant along with highlighting their journey. ‘ India’s Top PSUs 2018 ’ will be a valuable source of insight on the Indian PSUs. Dun & Bradstreet’s footprint and global reach will ensure that this publication will stand as an effective platform to reach out to potential partners on a global scale.

We hope you will enjoy reading this publication. We look forward to receiving your feedback and suggestions.

Preeta Misra Director – Learning & Economic Insights Group Dun & Bradstreet India


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Executive Summary

Public Sector Undertakings (PSUs) of the country have always played a key role in the country’s socio-economic development. Their importance is underscored by the fact that Central Public Sector Enterprises (CPSEs) provided employment to 1.13 mn people in FY17 and contributed ` 3.8 trillion to the central exchequer by way of excise duty, customs duty, corporate tax, interest on Central Government loans, dividend and other duties and taxes. The publication, ‘ India’s Top PSUs 2018 ’ is a compendium of the country’s public sector undertakings and captures the financial performance of top Central PSUs during FY17. The 2018 edition of the publication profiles 177 Central PSUs which include 143 companies from the non-financial segment, 16 public sector banks, 8 insurance companies and 10 companies from the FIs/NBFCs segment respectively.

Some of the key financial performance highlights of the featured PSUs during FY17 are:- • The aggregate total income of the 177 profiled PSUs stood at around ` 32.8 trillion in FY17; showing a growth of nearly 9% as compared to FY16 • The aggregate net profit of the 177 profiled CPSEs stood at nearly ` 1,489 billion in FY17, showing a growth of nearly 15% as compared to FY16 • Petroleum – refining & marketing sector emerged as the largest contributor in terms of both viz income and profit. Its share in aggregate income and profit in FY17 stood at 31% and 27% respectively • The eight Maharatnas and 16 Navratnas, i.e. 24 companies collectively accounted for nearly 43% of the aggregate total income of the profiled PSUs • In terms of income growth, Maharatnas and Navratnas showed equal growth of 8% in FY17 compared to the previous year The government is taking constructive measures, mostly through strategic divestment, to make the PSUs more efficient and globally competitive. We are also witnessing the accelerated role of PSUs in spearheading the government agenda of financial inclusion, digitization and technical collaborations for the Make in India campaign. Their role in building a New India becomes all the more critical keeping in mind their significant contribution in key areas of energy, financial services, infrastructure and power among others.

Dun & Bradstreet will continue to track the performance of Central PSUs and keep the readers updated on various developments through future editions of the ‘ India’s Top PSUs ’.

Naina R Acharya Leader - Operations Learning & Economic Insights Group Dun & Bradstreet India


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Methodology The eleventh edition of ‘ India’s Top PSUs ’ publication features 177 public sector undertakings (PSUs). The publication comprises - central public sector enterprises (CPSEs) which are a part of the Department of Public Enterprises (DPE) list (operational enterprises as on 31.03.2017); public sector scheduled commercial banks (SCBs) as defined by the Reserve Bank of India (RBI) on 31.03.2017, excluding regional rural banks (RRBs); public sector insurance companies as defined by the Insurance Regulatory and Development Authority of India (IRDAI) and other public sector NBFCs/financial institutions formed by the Act of Indian Parliament. The publication also includes a listing of state PSUs as collected from the websites of the Ministry of Corporate Affairs and Comptroller and Auditor General of India and websites of State Governments. The status of CPSEs (Maharatna, Navratna andMiniratna) is as enumerated by the DPE as on April 2018. Central public sector undertakings which have ceased to exist due to merger/amalgamation post 31.03.2017 are also excluded. Central public sector undertakings, for which the government has proposed strategic disinvestment through majority stake sale, complete stake sale; merger/amalgamation, proposed to be shut down etc. are marked with * in the listings for reference. The initial selection of the PSU data was based on compilations from various sources such as the DPE, RBI, IRDAI, BSE, Dun & Bradstreet’s database and data from various ministries. The shortlisted PSUs were sent a detailed questionnaire seeking operational and financial information. This publication features PSUs with a standalone total income equal to or above ` 1 bn during FY17 as a selection criterion. Information contained in this publication has been procured from authentic and credible sources available in the public domain such as company annual reports/documents, websites, DPE, and the registrar of companies. Further, companies that did not respond with critical data and/or whose information is not available in the public domain were not considered for this study to ensure that all information contained in this publication is verified and authenticated. All the financial information in the publication is based on standalone financials as per the revised Indian Accounting Standard or old GAAP adopted by the company and available in the public domain such as from annual reports or financial statements (audited or provisional) or as disclosed by DPE in its Public Enterprise Survey 2016-17. The various financial computations are as per Dun & Bradstreet methodology and have been explained explicitly in the ‘Definitions and Calculations’ section. Each company featured in the publication has been allotted a unique identification number (D-U-N-S ® - Data Universal Numbering System). This will help readers locate and obtain full-fledged information reports on these companies from the Dun & Bradstreet database. The editorial team is confident that ‘ India’s Top PSUs 2018 ’ will prove useful. Further, we would be pleased to receive your invaluable feedback and suggestions.



Definitions & Calculations This section defines financial terms and ratios used in this publication. • Total Income - Refers to the total revenue including other income as reported in the company’s stand- alone financial statements. • Net Profit - Refers to the profit after tax as reported in the company’s standalone financial statements. • Net Worth - Is the sum of share capital, equity equivalents and reserves & surplus. Equity equivalents include share warrants, ESOP etc. Debit balance appearing in the profit and loss account and foreign exchange translation reserve account, revaluation reserves, miscellaneous expenditure, and intangibles such as patents, goodwill, trademarks, copyrights, know-how, brands, licenses, rights, computer software and the likes are deducted from the Net Worth.

• Net depreciation as mentioned in profit & loss account. • Interest cost net of capitalisation wherever available





Profit Before Tax + Interest Expense + Depreciation and Amortisation Expense


EBITDA – Depreciation and Amortisation Expense

EBITDA Margin (%)

(EBITDA/Total Income) * 100 (Net Profit/Total Income)* 100

Net Profit Margin (NPM) (%) Return on Net Worth (%)

(Net Profit/Average Net Worth) * 100

Dividend Payout (%)

Equity Dividend/(Profit Before Tax as per Annual Report- Taxation Expense- Pref- erence Dividend)*100

Capital Employed

Long term debt + Net Worth

Return on Capital Employed (%)

(EBIT/Average Capital Employed) * 100 (PAT/Average Total Assets) * 100 (Total Debts) /Shareholder’s Fund

Return on Assets

Debt-to-Equity (times) Shareholder’s Fund

Equity Share Capital + Preference Share Capital+ Reserves and Surplus – Accumu- lated Losses – Deferred expenses Short Term Debt + Long Term Debt + Current maturities of Long Term Debt Non-Current Assets + Current Assets (excluding accumulated losses and deferred expenses)

Total Debt Total Assets

Average Total Assets Average Net worth

(Opening Total Assets + Closing Total Assets)/2 (Opening Net worth + Closing Net worth)/2

Average Capital Employed Interest Coverage (times)

(Opening Capital Employed + Closing Capital Employed) / 2

EBIT/Interest Expense


The publication also includes terms and indicators specific to the banking sector.




Total Business

As reported by the bank in its standalone financial statements OR Total Advances + Total Deposits as provided by the RBI Cash in hand + Balances with RBI + Balances with banks inside/outside India + Money at call + Investments + Advances + Fixed Assets + Other Assets

Total Assets

Net Interest Margin Net Interest Income

As reported by the bank in its standalone financial statements

Total Interest earned – Total Interest expended

Net NPA Ratio

As reported by the bank in its standalone financial statements

Return on Assets (ROA)

As provided in Company’s Annual Report

The publication also includes terms and indicators specific to the insurance sector • Net Commission Ratio as given in the Annual Report

• Solvency Ratio as given in the Annual Report • Retention Ratio as given in the Annual Report • Net Premium Earned is the sum of total of net premium earned from fire insurance, marine insurance, miscellaneous insurance and life insurance business

Symbols used N.A.

Not Available Current Ratio





Overview of PSUs in India

Overview of Public Sector Undertakings in India The public sector enterprises (PSEs) are an important instrument of most economies in the world for societal and public value creation. The key objective behind the establishment of PSEs globally is to provide efficient, reliable and affordable products and services in critical sectors like power generation, water supply, transport, oil & gas and mining. PSEs can contribute to overall social welfare, infrastructure improvement, poverty reduction and thereby inclusive economic growth. In India, the Central Public Sector Undertakings (CPSUs) have played an important role in creating an egalitarian society. The OECD statistics that comprises dataset for 40 sample countries 1 reveals that the countries in the sample area (excluding China) had 2,467 number of PSEs (with full/ majority stake of the central government), valued at over US$ 2.4 trillion and employing over 9.2 mn people (as at end-2015). China had 51,341 number of PSEs valued at US$ 29.2 trillion and employing over 20.25 mn people (as at end-2015).

Sectoral breakdown of SOEs, by equity value (excluding China as on end-2015)

Source: The size and sectoral distribution of state owned enterprise, OECD 2017

The sectoral breakdown of PSEs reveals that the financial sector is the largest individual sector accounting for 26% of all PSEs by value and 8% of all PSEs by employment (as at end-2015). This is followed by electricity & gas segment which accounts for 21% of all PSEs by value and 9% of all PSEs by employment.

1 The dataset comprises data for the following 40 countries: Argentina, Australia, Austria, Brazil, Canada, Chile, China, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Mexico, the Netherlands, New Zealand, Norway, Poland, Saudi Arabia, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the UK and the US.


Sectoral breakdown of PSEs by employment (excluding China as on end-2015)










Other utilities

Transportation Manufacturing Electricity & gas Finance

Other activities Primary sectors Telecom

Real estate

Source: The size and sectoral distribution of state owned enterprise, OECD 2017

In case of China, almost 58% of Chinese PSEs by value are found in the financial sectors (as on edn-2015). This is followed by primary sector (9%) and transportation sector (7%). In terms of employment, the primary sector accounts for the highest share of 29% of all PSEs. This is followed by manufacturing and finance sectors which account for 18% and 11% respectively. Public Sector Undertakings in India The Public Sector Enterprises (PSEs) also commonly referred to as the Central Public Sector Undertakings (PSUs) have played a critical role in the socio-economic development of India in the post-independence period. India at that time was an agrarian economy with weak industrial base and deficient investment and infrastructure facilities. Hence, the 1948 industrial policy resolution proposed development of core sectors through the PSUs. It was envisioned that the involvement of the public sector in various industrial and services sectors would help correct regional imbalances as well as generate employment.

Key objectives behind the establishment of PSUs • To achieve higher economic growth; • To achieve self-sufficiency in the production of goods or services; • To achieve long term equilibrium in balance of payments; • To ensure low and stable prices;

• To promote balanced regional growth; and • To generate employment opportunities

Note: Figures Stand for FY17, Source: Public Enterprises Survey 2016-17, Department of Public Enterprises


Since independence, the number of PSUs in India have grownmany folds. At the time of First Five Year Plan, only five PSUs were created with a total investment of ` 290 mn. As of March 31, 2017, the total number of CPSUs stood at 331 (out of which 257 were operational, while 74 were (under construction) 2 with a total investment of ` 12,503.73 bn as on Mar 31, 2017. In 2017, there were seven Indian companies in the Global Fortune 500 list, out of which three were PSUs.

Sector-wise operating PSUs

Source: Public Enterprises Survey 2016-17, Department of Public Enterprises

Financial Performance of PSUs in FY17 Aggregate turnover of PSUs witnessed a turnaround in FY17, albeit at low base of the previous year Gross revenue from operations/ aggregate turnover of PSUs that had witnessed significant decline in the last two years, showed a turnaround in FY17, albeit at lower base of the previous year. The aggregate turnover registered a growth of 6.5% in FY17 as compared to a decline of 8% in the previous fiscal. In FY15-FY16, PSUs were adversely impacted by the fall in global commodity prices, weak economic growth and volatile financial markets. In FY17 as well, the weak domestic economy continued to affect the performance of PSUs. Amongst sectors, the largest increase in the gross turnover was recorded by the agriculture sector (34.95%), followed by manufacturing, processing and generation sector (10.29%). The services sector, on the other hand, continued to register a degrowth of 1.86% in FY17 as compared to a decline of 1.9% in FY16. Petroleum (refinery & marketing) and power generation sector which cumulatively account for 57.8% of total gross turnover reported a growth of 10.3% and 10.7% respectively in gross turnover. Besides, the PSUs from sectors like chemicals & pharmaceuticals, agro-based industries, other minerals &metals, power transmission, industrial & consumer goods and steel witnessed substantial increase in the turnover, thereby contributing to the overall growth in gross turnover. Nonetheless, transportation vehicle & equipment, trading and marketing and fertilisers industries which reported a decline in the turnover, pulled down the growth in aggregate turnover of PSUs.

2 Yet to commence commercial operations


Top five sectors in term of growth in turnover in FY17

% y-o-y growth % share in turnover

Chemicals & pharmaceuticals


0.38 0.06 1.12 1.33

Agro-based industries Other minerals & metals

34.95 27.55 24.83 16.43

Power transmission

Industrial & consumer goods 0.45 Source: Public Enterprises Survey 2016-17, Department of Public Enterprises

Aggregate turnover of CPSUs


0.0 2.0 4.0 6.0 8.0








-10.0 -8.0 -6.0 -4.0 -2.0












Source: Public Enterprises Survey 2016-17, Department of Public Enterprises

Petroleum sector continues to account for more than 50% share in the total turnover of PSUs

Share of sectors in gross turnover of CPSUs (%)

Others include agro-based industries, other minerals & metals, fertilisers, chemicals & pharmaceuticals, transportation vehicle & equipment, industrial & consumer goods, textiles, power transmission, contract, construction & tech consultancy services, hotel & tourist services and telecommunication & information technology Source: Public Enterprises Survey 2016-17, Department of Public Enterprises


Industry-wise analysis of the turnover of the PSUs indicates that the petroleum (refinery &marketing) segment accounted for almost 51.9% share in the gross turnover in FY17. Other top revenue contributing sectors include trading & marketing (8.7%), power generation (5.9%), transport & logistic services (5.3%) and crude oil (5.1%). Growth in total income of PSUs remains muted In line with the top-line performance of the operational PSUs, the total income registered a growth of 3.3% in FY17, as compared to a decline of 10.3% in FY16. The growth in total income was largely supported by the lower input costs and growth in other income.

Net profits of the operating PSUs remain robust on the back lower input costs

Trend in net profit of operating CPSUs


10 15 20







0 5


-25 -20 -15 -10 -5











Source: Public Enterprises Survey 2016-17, Department of Public Enterprises

The aggregate net profit of operating PSUs has broadly shown a declining trend in the last five years. Growth in net profit which had peaked to 17% in FY13, reported a decline of almost 20% in FY15 owing to the global slowdown andweakening of international oil prices that led to fall in export earnings. Despite decline in aggregate turnover, growth in the aggregate net profit rebounded to 11.1% in FY16 primarily due to a steep decline in raw material costs. The global commodity prices largely remained subdued in FY16 due to weak global demand. This helped PSUs to keep input costs under control, thereby improving their profit margins. The lower input prices continued to support PSUs in FY17 as well with net profits registering a growth of 11.7%. The net profit has registered a CAGR of mere 3% between FY13-FY17. The manufacturing, processing and generation sector contributed almost 48.7% to overall net profit of PSUs, followed by mining & exploration and services sectors which contributed 37.1% and 14.2% to aggregate net profits respectively. Within manufacturing, processing and generation sector, textiles, heavy & medium engineering and petroleum (refinery & marketing) industries reported significant improvement in net profits, while steel, chemicals & pharmaceuticals and industrial & consumer goods reported heavy losses. Within services, except trading & marketing and telecommunication & information technology services, all other services segments reported net profits.


Further, the number of profit making PSUs increased from 164 in FY16 to 174 in FY17. The net profit of profit making PSUs registered a growth of 5.3% y-o-y to ` 1,526.5 bn in FY17. The top 10 profit making PSUs accounted for almost 63.6% of share in the net profit of profit making PSUs. Amongst the top 10 profit making PSUs, Indian Oil Corporation Ltd, Oil & Natural Gas Corporation Ltd and Coal India Ltd were the top three contributors, accounting for the share of 19.7%, 18.5% and 14.9% respectively in net profit of profit making PSUs. On the other hand, 82 PSUs reported net losses in FY17 as compared to 79 PSUs in FY16. The loss of loss making PSUs stood at ` 250.5 bn in FY17 as compared to ` 307.6 bn in FY16. The top 10 loss making PSUs in FY17 accounted for 83.8% share in net losses of the loss making PSUs. Amongst them top 3 loss making PSUs were Bharat Sanchar Nigam Ltd, Air India Ltd and Mahanagar Telephone Nigam Ltd, which accounted for a share of 22.8%, 18.8% and 14% respectively in net losses of loss making PSUs. Robust growth in contribution to central exchequer The total contribution of PSUs to central exchequer grew substantially by 39.8% to ` 3,855.79 bn in FY17 on account of increase in contribution of all the components (except interest) to central exchequer.

Contribution of CPSUs to central exchequer

1000 1500 2000 2500 3000 3500 4000 4500












0 500








*Contribution by way of excise duty, customs duty, corporate tax, interest on central government loans, dividend and other duties & taxes Source: Public Enterprises Surveys, Department of Public Enterprises

Real investment/ gross block in PSUs witnessed a rebound in FY17 The aggregate real investment in PSUs measured in terms of gross blocks registered a growth of 8.6% in FY17 as against a decline of 12.7% in FY16. The accumulated real investment in PSUs stood at ` 18,083.7 bn in FY17 as against ` 16,651.75 bn in FY16. Amongst sectors, manufacturing, processing & generation sector has a major share of 46% in real investment, followed by services and mining & exploration sectors with shares of 34% and 19% respectively.


Accumulated gross block in CPSUs ( ` bn)












Source: Public Enterprises Survey 2016-17, Department of Public Enterprises

Key policy decisions in FY17-FY18 The key policy decisions taken by the government with regards to PSUs are listed below.

Disinvestment Policy • Listing of profitable CPSUs on stock exchanges to unlock the value of the company, improve efficiency and promote ‘’people’s ownership’’ by encouraging public participation in CPSUs. The government has approved listing of 14 PSUs on stock exchanges in sectors like railways, defence, power, steel, renewable energy and insurance. The Government has also unveiled a mechanism/procedure along with indicative timelines for listing of CPSUs. • The listing of PSUs will be through public offer of shares upto 25% of GoI’s shareholding, which may include offer of fresh shares for raising of resources from market. • Strategic disinvestment by way of sale of substantial portion of Government shareholding in identified CPSUs upto 50% or more, along with transfer of management control. In the Union Budget for 2018-19, the government proposed strategic disinvestment in 24 PSUs. • In August 2017, the government approved setting up of an Alternative Mechanism (AM) to decide on the matters relating to terms and conditions of the sale from the stage of inviting of Express of Interests (Eols) till inviting of financial bid. • Total disinvestment proceeds during FY18 were ` 1,000.57 bn as against the revised target of ` 1,000.00 bn. Other policy initiatives • The government and market regulators have taken measures for development of monetisation vehicles Infrastructure Investment Fund (InvIT) and Real Investment Trust (ReITs) in India. In the Union Budget for 2018-19, the government proposed to initiate monetising select PSU assets using InvITs from next year. • The government also approved revised guidelines for time bound closure of sick/ loss making PSUs and disposal of moveable property assets. This is expected to help reduce delays in implementation of closure plans of sick/ loss making PSUs.


• The proposals for diversification of portfolios to maintain business performance were taken up by the Boards of PSUs. In addition, the Boards of Maharatna and Navratna PSUs have been delegated powers, inter-alia, to (i) incur capital expenditure without government approval on purchase of new items or for replacement, to take up new projects, modernization, etc., (ii) make equity investment to establish financial joint ventures and wholly owned subsidiaries, and (iii) undertake mergers & acquisitions subject to laid down conditions. The Boards of Maharatna and Navratna PSUs have also been delegated powers to raise debt from domestic and international markets. • In August 2017, the government gave approval for public sector banks to amalgamate through an Alternative Mechanism (AM). On April 1, 2017, the State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad and Bharatiya Mahila Bank got merged with the State Bank of India. • The aggregate total income of the 177 profiled PSUs stood at around ` 32.8 trillion in FY17; showing a growth of nearly 9% as compared to FY16 • The aggregate net profit of the 177 profiled CPSEs stood at nearly ` 1,489 billion in FY17, showing a growth of nearly 15% as compared to FY16 • Petroleum – refining &marketing sector emerged as the largest contributor in terms of both viz income and profit. Its share in aggregate income and profit in FY17 stood at 31% and 27% respectively • The eight Maharatnas and 16 Navratnas, i.e. 24 companies collectively accounted for nearly 43% of the aggregate total income of the profiled PSUs • In terms of income growth, Maharatnas and Navratnas showed equal growth of 8% in FY17 compared to the previous year Some of the key financial performance highlights of the 177 profiled PSUs during FY17 are:-




India’s Top PSUs 2018

ONGC Videsh Limited

Siberia, which is producing more than 5 MMTOE. We have also acquired a 4 per cent stake in a large offshore oilfield in Abu Dhabi. In recent times, we have acquired a few exploration projects in Bangladesh, Myanmar, New Zealand, Namibia and Israel. ONGC Videsh adopts a balanced portfolio approach and currently has 15 producing assets, four discovered assets under development, 18 exploratory blocks and four pipeline projects. In FY18, ONGC Videsh’s production equaled 26.2% of India’s domestic production of oil, and 20.7% of oil & natural gas, respectively. In terms of reserves and production, ONGC Videsh has become the second largest petroleum company in India, next only to its parent ONGC. How important has Russia been for the company’s operations? Kindly share some insights on the same. ONGC Videsh has a stake in three projects in Russia, - a 20% PI in Sakhalin-1 acquired in 2001, Imperial Energy acquired in 2009 and 26% equity in Vankorneft acquired in 2016. Alongside projects in Sudan and Vietnam, Sakhalin was one of the anchor projects which contributed to significant growth of ONGC Videsh in the 2000s. Russian projects continue to hold key position in the company’s portfolio, with 63% of company’s production coming from Russia. G2G relations between India and Russia are good, which helps our business activities. There we might not have windfall gains, but losses are also optimized. Optimized taxation regime,

low cost of production, high reserves and friendly relationship make Russia attractive for us. In recent times, the world has witnessedvolatility in crudeoil prices. How has this volatility impacted the company’s operations? How is the company mitigating the risks arising due to volatile crude prices? Oil price volatility is a major challenge to companies in the E&P business. Price volatility directly impacts us, so we try to mitigate by cross-hedging and portfolio diversification. We also try to engage ourselves in exploration projects, which gives us a value multiplier with low investment. Of course, risk of investment is there as exploration is not always successful. Then again, carbon footprint concerns and renewables are posing new threats to E&P industry as a whole. Globally, the energy-related business environment is undergoing fundamental shifts and we are watchful to remain in sync with the evolving challenges. Howhas the recent crisis in Venezuela impacted the company’s operations in the country? What measures is the company taking to address the issue? The Venezuela projects that we are involved in are of sound potential but suffer from above-the-ground risks. We have a 40 per cent stake in one heavy oil onshore project, where we are producing 20,000 barrels of oil per day. We have been positively engaging with the Venezuelan side for payment of pending dividends. Last year, we

“The vision of creating integrated oil & gas companies offers better synergy and growth prospects, provided the ecosystem of the E&P business remains conducive to growth.”

Narendra K Verma Managing Director

Kindly share the details of ONGC Videsh’s business operations and project portfolio across various countries. ONGC Videsh completed its journey of 50 years in 2015, but the company’s initial growth happened from 2000 onwards. Before that, ONGC Videsh was a single asset company – with a sole exploration block in Vietnam where we discovered gas, but were struggling to develop it. After 2000, ONGC Videsh aggressively ventured into overseas E&P and has evolved as a substantial entity with initial acquisitions in Sudan and Sakhalin. The successful closing of these big ticket acquisitions has accelerated the growth of the company. After that, we expanded operations in Syria, Libya, Brazil, Colombia, Venezuela, Azerbaijan, Russia and UAE. Currently, we are in 20 countrieswith 41 projects. In the last two years, we have acquired two major assets. One is Vankorneft in

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Experts’ View

India’s Top PSUs 2018

How would you outline your capex outlook for the next 2-3 years? We are presently engaged in the development of Mozambique offshore gas discovery in Area-1 project, which is a major investment project that will result in a net outgo to the company to the tune of US$ 4 billion. There is another large project in Venezuela which is also in the development stage. We have already invested in this project, that will soon go into its commercial phase. There are some developments in the Sakhalin area as we recently renewed the contract for 25 years. The Azerbaijan contract has also been renewed. Expansion in Sakhalin due to new field development, deeper exploration and development in Myanmar and renewed development phase in Brazil and Azerbaijan are new investment areas. Recently, we have entered in Vankorneft in Russia and offshore Lower Zakum in UAE that shall have additional sustained capex spending. Apart from the ongoing schemes, a major chunk of our capex outlook in the short term is through business development for new ventures overseas.

agreed to receive the payment in instalments. We have received three instalments, after which the dividends stopped due to the local situation. We are seized of this issue, and assurances have been given by the Venezuela side at the Ministerial level to resume the payment in April 2019. What kind of impact do you foresee from the Government’s vision of creating integrated oil & gas companies? Integration across the hydrocarbon value chain of upstream, midstream and downstream is perceived to be better as it provides a natural hedge against price volatility. In times of higher crude oil prices, upstream companies create additional value realization whereas the downstream refinery companies lose out due to lowering margins on account of higher feed cost. In a reverse scenario of lower crude oil prices, refinery companies gain more compared to upstream E&P companies. Therefore, the vision of creating integrated oil & gas companies offers better synergy and growth prospects, provided the ecosystem of E&P business remains

conducive to growth, with resource availability, financial maneuvering, operational and marketing freedom, regulatory traits, etc. What are the key areas in which you plan to diversify? What is your strategy for non-conventional energy? M&A is one of the critical elements to our growth strategy in the short term to achieve annual production of 20 MMTOE. Value creation through exploration and organic growth becomes significant on a long-term basis. With respect to diversification, the global energy industry is undergoing fundamental changes with greater emphasis on low carbon non- fossil fuels, green energy initiatives, disruptive technologies in energy, and the development of cutting- edge new technologies to make non-conventional resources more affordable. We cannot remain aloof to this reality. Actively participating in renewables is a call that we will take in due course. However, our parent company ONGC is already engaged in renewable energy, particularly in wind energy.

Experts’ View

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India’s Top PSUs 2018

Hindustan Copper Limited

was incorporated on November 9, 1967 and has completed 50 years of its Journey last year. It started with copper mines of Khetri (Rajasthan) and gradually entered other states. Hindustan Copper is India’s only vertically integrated copper producing company and has facilities that encompass mining, beneficiation, smelting, refining and casting of refined copper into downstream products, is looking at a major expansion by 2020. Last few years have been challenging, on one side we need to be sustainable in event of falling copper prices and on the other hand funds need to be available for the ongoing mine expansion projects. In the last two years we have been able to create new business verticals with thrust and technology focus to monetize the waste generated from mining. We are looking at waste-to-wealth projects as the next focus areas. We produce mining waste in the form of tailings that occur after we take out the copper concentrate. Only 1% copper is present in the copper ore, which is called metal-in-concentrate, which is then converted to powder which contains 25% copper. The remaining 99% of the ore is a waste material or tailings. This contains copper as well as precious metals like gold, silver too. We are now working on a project called Copper Ore Tailing, at Malanjkhand to treat 3.3 mt per annum. The plant is expected to be commissioned by July 2018 of this fiscal is expected to fetch us revenues

competitive compared to global benchmark, most of the downstream copper industry is not abreast with latest developments. More focus needs to be given to energy efficiency and product quality. Most of the critical downstream products like thin gauge copper foils, oxygen free copper and profiles are imported in large numbers in the country. Tell us journey of Hindustan Copper for last few years and what are the future expansion plans. At the outset I like to highlight the performance of the Company on the concluded financial year 2017-18 and is as under: i. Turnover of ` 1719 crore has increased by 35% compared with last year. ii. Profit before tax of ` 122.69 increased by 29% compared with last year. iii. Total Copper sales volume was best in last seven years. iv. Copper cathode production was 39% higher than the last year. v. Metal-in-Concentrate production was 4% higher than the last year. vi. Reopened Kendadh mines at Jharkhand in Dec 2017. vii. Commissioned Banwas mine (a new mines) at Khetri Copper Complex, Rajasthan in June 2017. viii. Capex has increased by 47% during 2017-18 to 589 crore and target for current year is ` 700.0 crore.

“The copper consumption in India is expected to grow by 7% to 8%. Focus on improving power transmission efficiency and investmenton infrastructure will drive the growth of copper consumption in India in coming years.”

Santosh Sharma Chairman and Managing Director

In technological advancement are the Indian copper manufacturer keeping abreast with the latest developments or in your opinion more needs to be done? Technological developments and its assimilation is an on-going process in an industry. With regards to Indian copper industry from the prospective of sustainability, technology intervention and its upgradation to manufacture value added and new innovative products for the society is need of the hour. Recent fluctuations in copper prices and free trade agreements with copper producing countries have posed a challenge to the Indian copper industry. The industry needs to be innovative on products and cost management tomeet the forthcoming challenges. In India, while the primary copper industry is fairly in tune with the latest technology and are cost terms of

Hindustan Copper Limited (HCL),

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Experts’ View

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