Hindustan Aeronautics Ltd (HAL) has been officially made part of the 'Maharatna' club by the Government of India (GoI). The Department of Public Enterprises announced the development on X (formerly Twitter) following Finance Minister Nirmala Sitharaman's nod for the upgrade.
India now has 14 Maharatna public sector companies. This includes names like Indian Oil, BHEL, NTPC, BPCL, Coal India, GAIL, HPCL, SAIL, ONGC, Power Grid, PFC, Oil India, REC and the newly upgraded Hindustan Aeronautics Limited (HAL).
"Hon’ble Finance Minister has approved the upgradation of Hindustan Aeronautics Limited (HAL) to 14th #Maharatna CPSE. The proposal has earlier been recommended by Inter-Ministerial Committee (IMC) headed by Finance Secretary and Apex Committee headed by Cabinet Secretary," the social media post read.
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On year-to-date basis, the shares of the defence company have delivered a staggering return of over 57 per cent on the National Stock Exchange.
What does 'Maharatna' status mean?
A Maharatna 'status' is given to those public sector enterprises in India that have shown outstanding performance in terms of financial strength.
For the financial year 2023-24, HAL reported a massive net profit of Rs 7,595 crore and an annual turnover of Rs 28,162 crore.
This status allows companies to operate with more flexibility and autonomy in decision-making and that too without needing permissions from the government.
For instance, companies with 'Maharatna' status can invest up to 15 per cent of their net worth in a project without requiring government approval.
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Multiple requirements have to be met before Maharatna status can be conferred to any CPSE. Firstly, the company must have an average turnover of over Rs 25,000 crore alongside an average annual net worth of more than Rs 15,000 crore. Secondly, the company must already hold Navratna status and should be listed on an Indian stock exchange.
The company should also have an average annual net profit of more than Rs. 5,000 crore.
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