Maharatna, Navratna and Miniratna CPSEs

• Context (LM): The Department of Public Enterprises (DPE) upgraded the four Central Public Sector Enterprises (CPSEs) – Railtel Corporation of India, Solar Energy Corporation of India, SJVN (Satluj Jal Vidyut Nigam), and NHPC – to ‘Navratna‘ status.

Satluj Jal Vidyut Nigam

• It is an Indian public sector undertaking involved in hydroelectric power generation and transmission.
• It was incorporated in 1988 as Nathpa Jhakri Power Corporation, a joint venture between the Government of India and the Government of Himachal Pradesh.

NHPC (National Hydroelectric Power Corporation)

• NHPC Limited is India’s leading hydropower company, with a total installed capacity of 7,097.2 MW of renewable energy.
• Established in 1975, Headquartered in Faridabad, Haryana.
• The company has expanded its objects to include other sources of energy like Solar, Geothermal, Tidal, Wind etc.
• At present, NHPC is a Mini Ratna Category-I Enterprise of the Central Government.

Navratna Status

• In 1997, the government launched the Navratna plan to select CPSEs with comparative advantages and to help them become global giants.

Eligibility

• The CPSE should be a Miniratna I and Schedule A Company.
• The CPSE should have obtained an ‘excellent’ or ‘very good’ rating in three of the last five MOUs.
• The CPSE should have obtained a composite score of 60 or more, calculated concerning six specified parameters or ratios.
  • Net Profit to Net Worth (25%)
  • Manpower Cost to Cost of Production or Cost of Services (15%)
  • PBDIT (Profit Before Depreciation, Interest, and Taxes) to Capital Employed (15%)
  • PBDIT to Turnover (15%)
  • Earnings Per Share (10%)
  • Inter-Sectoral Performance (20%)

Benefits

• The Navratna status grants enhanced autonomy in financial and operational matters to CPSEs.
• They can make large investments of up to Rs 1,000 crore or 15% of their net worth on a single project without needing permission from the Central Government.
• They can invest up to 30% of their net worth annually but it should not exceed Rs.1000 crores.
• They can establish joint ventures overseas, access new markets, and leverage local expertise.
• It empowers companies with faster decision-making, increased efficiency, and greater empowerment.

Criteria for granting Maharatna status to CPSEs

• CPSEs having Navaratna status.
• Listed on the Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.
• Should have a significant global presence/international operation.
• In the last three years, the company should have achieved,
  • Average annual turnover > Rs. 25,000 crores.
  • Average annual net worth > Rs. 15,000 crores.
  • Average annual net profit (after tax) > Rs. 5,000 crores.

Criteria for granting Miniratna status to CPSEs

Miniratna Category-I status

• Must have achieved profitability in the last three consecutive years.
• Need to demonstrate a pre-tax profit of Rs.30 crores or more in at least one of the three years.
• Must maintain a positive net worth.

Miniratna Category-II status

• Requires a consistent track record of profitability for the last three consecutive years.
• They should also have a positive net worth to be eligible for consideration.