Get ready for Maharatnas

The Cabinet granted the coveted ‘Maharatna’ status, a new category among state-owned companies, to enable the boards of heavyweight companies such as ONGC, Steel Authority of India Limited and NTPC to form joint ventures, set up overseas arms and decide on mergers and acquisitions.

The Cabinet on Thursday granted the coveted ‘Maharatna’ status — a new category among state-owned companies — to enable the boards of heavyweight companies such as ONGC, Steel Authority of India Limited and NTPC to form joint ventures, set up overseas arms and decide on mergers and acquisitions.

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Central public sector enterprises (CPSEs) given ‘Maharatna' status can now decide on investments of up to Rs 5,000 crore without having to knock on the doors of the government for approval.

“The main objective of the Maharatna Scheme is to empower mega CPSEs to expand their operations and emerge as global giants,” Information and Broadcasting Minister Ambika Soni told reporters.

The government has set stringent criteria for firms to qualify as Maharatnas – literally meaning “Great Jewels.”
They must have annual revenues of Rs 25,000 crore and at least Rs 5,000 crore in net profit. Only four companies—ONGC, SAIL, NTPC and IOC will qualify as Maharatnas under the definition.

“It was felt that these CPSEs which are at the higher end of the Navratna category and have potential to become Indian multinational companies (MNCs) can be recognised as a separate class, ” an official said.

At present, the boards of 18 'Navaratna' companies such as ONGC, BHEL, Coal India, GAIL and NTPC, can decide on investments of up to Rs 1,000 crore without government approvals.