Ghalla Bhansali Stock Brokers Pvt. Ltd.19 th Januar y, 2010
www.ghallabhansali.com
Navratna To Maharatna
The Opportunity
is
Now
Mughal emperor Akbar’s darbar (court) had nine extraordinary men wh
advised him on different matters. Conferred with the title of Navratna (nine gems
they soared to almost legendary heights in their respective area of activity. Th
modern day Navratnas in India, honoured by the Government of India, are the new
crown jewels of the nation. These Navratnas are the best Indian home‐grow
companies, which have become the flag‐ bearers in their respective area of activity
For e.g., companies like ONGC, NTPC, SBI etc. have almost become synonymou
with Oil, Power and Banking respectively, in India.
But fortunately for investors, unlike Akbar’s court, this is not an exclusivclub. The mini‐ratna companies in India are getting ready to break into the bi
league and are standing out for their efficiency and performance. With more an
more PSUs entering the market like NHPC, Oil India etc., and many more on th
roadmap, the opportunities are ever expanding.
The Maharatna status
At the end of last year, the government announced a new policy unde
which select top performing central public sector units would be delegate
substantially more financial and managerial powers than what they already have
The policy approved by the Cabinet seeks to provide further incentives to publ
sector enterprises that are in the category of Navratnas and already enjoy
substantial measure of operational freedom.
From these Navratnas those that fulfill certain well defined criteria will b
elevated to the Maharatna status. The government, which will continue to be th
majority shareholder in these companies, will give the Maharatnas greater leewa
in operational matters than they now enjoy as Navratnas.
Norms for elevation as Maharatna
o An existing Navratna status. o Listing on the stock exchanges with minimum public shareholding a
prescribed by the SEBI.
o Annual turnover of more than Rs.25,000 crore for the last three years.
o Average annual net worth of at least Rs.15,000 crore.
o Average annual net profit of more than Rs.5,000 crore for the last thre
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