Maharatna companies in India; Do you own any?

Last weekend, my friend and I were discussing the market and how it had performed during the week, including government companies in which my friend has investments.

This week, the market faced a decline, hitting crucial support levels due to the conflict between Israel and Hamas. This war not only affected their economy but also had an impact on other countries, including the Indian economy.

Following this news, the market opened with a gap down, recovered during the morning session, but eventually closed near the day’s low yesterday. Today, the Nifty index opened with a gap up and is currently trading at its day’s high.

During our discussion, my friend mentioned that he has several government companies in his portfolio, including BHEL Limited. I informed him that it was a good choice and that BHEL Limited is a Maharatna company. Curious about what that designation means, my friend asked, ‘What is a Maharatna company?

So, in this article, we will explore what I explained to him about it, along with the criteria for a company to be designated as a Maharatna company. We will also list some of their names and delve into their historical returns.

It’s important to note that only government companies receive these designations.

There is a total of 13 Maharatna companies. To attain this prestigious status among Central Public Sector Enterprises (CPSEs), the following conditions must be satisfied:

•         The CPSE should already hold the Navratna status, a prior recognition.
•         The CPSE must be publicly listed on an Indian stock exchange and adhere to the minimum public shareholding requirements
  mandated by SEBI regulations.
•         Over the past three years, the CPSE should have maintained an average annual turnover exceeding Rs 25,000 crore.
•         Over the same three-year period, the CPSE should have maintained an average annual net worth exceeding Rs 15,000 crore.
•         The CPSE should have achieved an average annual net profit after tax exceeding Rs 5,000 crore during the last three years.
•         Additionally, the CPSE should demonstrate a substantial global presence or be actively engaged in international operations.

These criteria collectively determine the eligibility of a CPSE for the coveted Maharatna status, signifying its exceptional standing and capabilities within the public sector.

Now it’s time to explore the companies and their stock performance:

Among all the Maharatna companies listed in the Indian markets, BHEL Limited emerged as the top performer, with the company’s stock generating an impressive multi bagger return of 343% in the last three years.

On the other hand, investors in BPCL Limited were disappointed as the stock did not deliver promising results despite its prominent designation.

When considering the size of these companies, five of them exceed a market capitalisation of over 1 lakh crore. ONGC Limited tops the list in this criterion, with a market cap of Rs 2,30,722.32 crore, while last but not least is Oil India Limited, with a market capitalization of Rs 34,619.75 crore.

Investors must keep these stocks on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.