OMC sitting on Rs 4,500 cr cash surplus

Odisha Mining Corporation (OMC), the most profitable state-owned resource company in the country, is sitting on a cash surplus of Rs 4,500 crore.

The bulk mineral producer which has been categorized as ‘gold PSU’ has no plans to park its surplus funds on mutual funds and other market related instruments despite the go-ahead from the department of public enterprises.

“We have an accumulated surplus of Rs 4,500 crore. As of now, we have no plans to invest this surplus amount on markets. Instead, we have parked this surplus in fixed deposits of banks,” said Saswat Mishra, chairman and managing director of OMC.

OMC posted turnover of Rs 2,141.38 crore, recording net profit of Rs 1,287.50 crore in 2011-12, as per provisional figures available at the corporation's website. The state run miner contributed Rs 230 crore by way of royalty and paid Rs 85.64 crore sales tax in last fiscal. The PSU runs 12 operational mines that raise iron ore, manganese and chrome ore.

Based on their financial performance, the department of public enterprises had developed four categories for classification of the PSUs- platinum, gold, silver and bronze.

Since no state run PSU was listed on an Indian exchange, none was kept under platinum category.

Four PSUs - OMC, Odisha Power Generation Corporation Ltd (OPGC), Odisha Hydro Power Corporation (OHPC) and Industrial Infrastructure Development Corporation of Odisha (Idco) were placed under ‘gold’ category.

At a recent meeting on ‘Investment of Surplus funds by state PSUs’, headed by finance secretary J K Mohapatra, it was decided that the board of directors of these four PSUs can take decision on investing their surplus funds in the market.

To earn the gold category tag, a PSU has to maintain minimum annual average annual turnover of Rs 100 crore and minimum average annual net profit of Rs 10 crore in the last three years.

Meanwhile, Idco which has piled up a surplus of around Rs 600 crore has also ruled out investment in market related instruments since it plans to use the proceeds to fund its upcoming projects.

“Idco has a lot of projects on the pipeline where we need to invest funds. We are teaming up with OMC to develop a common rail corridor for the coal rich Angul-Talcher belt. Besides, there are a host of other projects which need substantial investments. In addition to using surplus funds, we would be borrowing from the markets to fulfill our project obligations,” said a top Idco executive.

Officials of OPGC and OHPC were not immediately available for comments.