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MAHARATNA

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.

WHAT IS MAHARATNA?

Having Navratna status.Listed on Indian stock exchange with minimum prescribed

public shareholding under SEBI regulations.An average annual turnover of more than Rs. 20,000. crore

during the last 3 years. Earlier it was Rs 25,000 Crore. An average annual net worth of more than Rs. 10,000[ crore

during the last 3 years. Earlier it was Rs. 15,000 crore. An average annual net profit after tax of more than Rs.

2500 crore during the last 3 years. Earlier it was Rs. 5000 crore. 

Should have significant global presence/international operations.

How do companies achieve the status

Coal India LimitedIndian Oil Corporation LimitedNTPC LimitedOil & Natural Gas Corporation LimitedSteel Authority of India Limited 

List of maharatnas

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,

navratna

Incurring capital expenditure upto 1000 crores without government approval.

Entering into joint venturesEffecting organisational restucturingCreation and winding up of posts below board

level.To raise capital from domestic and

international marketsTo establish financial joint ventures subject to

equity with special limits.

Powers of navratna

Bharat Electronics LimitedBharat Heavy Electrical LimitedBharat Petroleum Corporation LimitedGAIL (India) LimitedHindustan Aeronautics LimitedHindustan Petroleum Corporation LimitedMahanagar Telephone Nigam LimitedNational Aluminium Company Limited

Navratna companies list

NMDC LimitedNeyveli Lignite Corporation LimitedOil India LimitedPower Finance Corporation LimitedPower Grid Corporation of India LimitedRashtriya Ispat Nigam LimitedRural Electrification Corporation LimitedShipping Corporation of India Limited

THE GOVERNMENT HAS ALSO GRANTED FINANCIAL AND OPERATIONAL AUTONOMY TO SOME OTHER PROFIT MAKING PSU’S SUBJECT TO CERTAIN CONDITIONS.THEY ARE CATEGORIZED AS MINIRATNA .

THE ENTERPRISES WHICH HAVE MADE PROFITS FOR LAST THREE YEARS AND HAS EARNED A NET PROFIT OF 30 crores OR MORE IN THE THREE YEARS.

MINIRATNA CATEGORY ONE

1.         Airports Authority of India2.         Antrix Corporation Limited3.         Balmer Lawrie & Co. Limited4.         Bharat Dynamics Limited5.         BEML Limited6.         Bharat Sanchar Nigam Limited7.         Bridge & Roof Company (India) Limited8.         Central Warehousing Corporation9.         Central Coalfields Limited10.     Chennai Petroleum Corporation Limited11.     Cochin Shipyard Limited12.     Container Corporation of India Limited

Miniratna category one list

13.        Dredging Corporation of India Limited 14.        Engineers India Limited 15.        Ennore Port Limited 16.        Garden Reach Shipbuilders & Engineers Limited 17.        Goa Shipyard Limited 18.        Hindustan Copper Limited 19.        HLL Lifecare Limited 20.        Hindustan Newsprint Limited 21.        Hindustan Paper Corporation Limited 22.        Housing & Urban Development Corporation Limited 23.        India Tourism Development Corporation Limited 24.        Indian Railway Catering & Tourism Corporation Limited 25.        IRCON International Limited 26.        KIOCL Limited 27.        Mazagaon Dock Limited

28.        Mahanadi Coalfields Limited29.        Manganese Ore (India) Limited30.        Mangalore Refinery & Petrochemical Limited31.        Mishra Dhatu Nigam Limited32.        MMTC Limited33.        MSTC Limited34.        National Fertilizers Limited35.        National Seeds Corporation Limited36.        NHPC Limited37.        Northern Coalfields Limited38.        Numaligarh Refinery Limited39.        ONGC Videsh Limited40.        Pawan Hans Helicopters Limited

41.        Projects & Development India Limited42.        Rashtriya Chemicals & Fertilizers Limited43.        RITES Limited44.        SJVN Limited45.        Security Printing and Minting Corporation of India

Limited46.        South Eastern Coalfields Limited47.        State Trading Corporation of India Limited48.        Telecommunications Consultants India Limited49.        THDC India Limited50.        Western Coalfields Limited51.        WAPCOS Limited  

The enterprises should have made profits for at least three years and have a positive networth.

Miniratna category two

    Bharat Pumps & Compressors Limited     Broadcast Engineering Consultants (I) Limited     Central Mine Planning & Design Institute Limited     Ed.CIL (India) Limited     Engineering Projects (India) Limited     FCI Aravali Gypsum & Minerals India Limited     Ferro Scrap Nigam Limited     HMT (International) Limited     HSCC (India) Limited     India Trade Promotion Organisation     Indian Medicines & Pharmaceuticals Corporation Limited     M E C O N Limited     National Film Development Corporation Limited     National Small Industries Corporation Limited     P E C Limited     Rajasthan Electronics & Instruments Limited

Both categories of miniratnas are granted certain autonomy like incurring capital expenditure without government approval upto 300 crores or their net worth {for miniratna category one}and incurring upto 150 crore capital expenditureupto 50 percent of their companies networth.{for miniratna category two}.

These enterprises can also enter into joint ventures subject to certain conditions,set up subsidary companies and overseas offices enter into technology joint ventures.

The companies listed in the presentation if were to be dissinvested in which ratio would it be dissinvested?

Answer:While pursuing disinvestment, Government has to retain majority shareholding, i.e. at least 51% and management control of the Public Sector Undertakings.

The government can by selling 49% SHARES by FPO.The government decides on company to company basis

the amount of dissinvestment.STRATEGIC SALE:

 

Question asked

 In a strategic sale, the obvious stakeholders are the Government and the Strategic Partner. However, there are others also whom the transaction affects. They are the other shareholders and the employees. Depending on the success of the transaction the value of the shares held by the other shareholders would behave. Therefore, they are directly affected. Transfer of shares is generally governed by the provisions of the Companies Act, 1956 (sections 108 etc). In case of listed companies, however, the interest of the small investors is taken care of by SEBI through its various regulations. What we are concerned with most are the regulations regarding takeovers, listing and de-listing. The SEBI Takeover Code gets triggered when a person acquires more than 15% of the voting equity shares of the company. Then, the person taking over these shares is required to make a public offer to purchase shares not less than 20% of the equity of the company. This provision has a great impact on the strategic sale transaction.

For instance, in the example given above, the Strategic Partner would have to buy another 20% of the shares from the public which means he has to buy 45% of the shares i.e. the transaction size more than doubles, which in big PSUs may mean enormous sums of money. When the deal size goes up, it reduces the number of players and hence competition. The other impact it can have is that it reduces the floating stock, which can at times go even below 10%, resulting in de-listing of the company. Reduction in floating stock affects trading and hence impacts the value of the residual shareholding of the Government. Apart from the immediate effect the transaction would have on the share prices, the other shareholders also get affected depending upon whether the Strategic Partner enhances corporate value and hence their earnings or not.