The Indian government is mulling various steps to prevent further depreciation of rupee against the dollar.
One of the steps considered by the government is to ask financially strong central government-run companies to raise debt from overseas investors.
According to one estimate, state-run companies could raise $25-30 billion of capital through issue of bonds overseas. This amount can be raised by leveraging the balance sheets of non-financial PSUs by up to 50 per cent of their net worth, reports indicate.
The top 21 non-financial central public sector undertakings had a combined net worth of Rs 568,011 crore ($95 billion) as at the end of March 2013. In comparison, the total debt on their books was around Rs 2.5 lakh crore — mostly for oil marketing companies, power companies (NTPC & PowerGrid) and Steel Authority of India (SAIL).
Nine of these 21 in the sample were debt-free and sitting on surplus cash & equivalents of Rs 1.18 lakh crore ($20 billion) — nearly half of it accounted for by Coal India.
Other members of this club include NMDC, ONGC, Bharat Electronics, Bharat Heavy Electricals, Container Corporation and Engineers India. Seven other PSUs, including Gail, NTPC, SAIL, Indraprastha Gas and Petronet LNG had moderate debt on their books, with a debt-to-equity ratio of less than 0.5.
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