Criteria for awarding Maharatna, Navaratna and Miniratna Status

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Maharatna status
In 2009, the government established the Maharatna status, which raises a company's investment ceiling from Rs. 1,000 crore to Rs. 5,000 crore. The Maharatna firms can now decide on investments of up to 15 per cent of their net worth in a project; the Navaratna companies could invest up to Rs 1,000 crore without explicit government approval.
Criteria
The six criteria for eligibility as Maharatna are:
  1. Having Navratna status.
  2. Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.
  3. An average annual turnover of more than Rs. 20,000 crore during the last 3 years. Earlier it was Rs 25,000 Crore.
  4. An average annual net worth of more than Rs. 10,000 crore during the last 3 years. Earlier it was Rs. 15,000 crore.
  5. An average annual net profit after tax of more than Rs. 2500 crore during the last 3 years. Earlier it was Rs. 5000 crore.
  6. Should have significant global presence/international operations.
 List of Maharatna
  1. Coal India Limited [10]
  2. Indian Oil Corporation Limited [11]
  3. NTPC Limited [12]
  4. Oil and Natural Gas Corporation Limited [13]
  5. Steel Authority of India Limited
  6. Bharat Heavy Electricals Limited
  7. Gas Authority of India Limited
  8. Bharat Petroleum Corporation Limited
Navratna status
The Central Public Sector Enterprises (CPSEs) fulfilling the following criteria are eligible to be considered for grant of Navaratna status:
Having Schedule ‘A’ and Miniratna Category-1 status.
Having atleast three ‘Excellent’ or ‘Very Good’ Memorandum of Understanding (MoU) ratings during the last five years.
Having a composite score of 60 or above out of 100 marks based on its performance during the last three years on the following six identified efficiency parameters:
Performance Parameters
Maximum Marks
Net Profit to Net Worth
25
Manpower cost to cost of production or services
15
Gross margin as capital employed
15
Gross profit as Turnover
15
Earnings per Share
10
Inter-Sectoral comparison based on Net profit to net worth
20
Total
100
            As compared to other CPSEs, the Boards of Navaratna CPSEs have been delegated enhanced powers in the areas of (i) capital expenditure; (ii) equity investment in joint ventures/subsidiaries in India or abroad, (iii) human resources development (iv) orgnaisational restructuring and (v) raising of debt from the domestic capital markets and borrowings from international markets.
Navratna was the title given originally to nine Public Sector Enterprises (PSEs), identified by the Government of India in 1997 as having comparative advantages, which allowed them greater autonomy to compete in the global market. The number of PSEs having Navratna status has been raised to 16, The government is likely to accord the coveted status to Engineers India Limited, which is under consideration. Total 16 PSUs have been granted Navaratna status.

Miniratna Status

In addition, the government created another category called Miniratna. Miniratnas can also enter into joint ventures, set subsidiary companies and overseas offices but with certain conditions. In 2002, there were 61 government enterprises that were awarded Miniratna status. However, at present, there are 67 government enterprises that were awarded Miniratna status.

Category I

This designation applies to PSEs that have made profits continuously for the last three years or earned a net profit of Rs. 30 crore or more in one of the three years. These miniratnas granted certain autonomy like incurring capital expenditure without government approval up to Rs. 500 crore or equal to their net worth, whichever is lower.


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