HAL likely to bag 'Maharatna' PSU status by end of year, shares gain

The Maharatna status allows companies to incur capital expenditure on purchase of new items or for replacement, without any monetary ceiling.

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Hindustan Aeronautics Ltd. or HAL shares gained over a percent in trade on September 13 after reports suggested the public sector defense player could be the next to a 'Maharatna' PSU.

According to CNBC-TV18, HAL could be upgraded to 'Navratna' to 'Maharatna' by the end of this year.

At 12.05 pm, HAL shares were muted, quoting Rs 4,649.75 on the bourses, up 0.17 percent compared to the previous session's close.

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Oil India was the most recent company to receive "Maharatna" status from the government, which was granted in August of last year.

India now has 13 "Maharatna" public sector undertakings, including BHEL, BPCL, Coal India, GAIL, HPCL, Indian Oil, NTPC, ONGC, Power Grid, SAIL, Oil India, REC, and PFC.

To be eligible for the grant of the Maharatna status, the company should have an average turnover of over Rs 25,000 crore, an average annual net worth of more than Rs 15,000 crore, and an average annual net profit of over Rs 5,000 crore during the last three years.

The Maharatna status allows companies to "incur capital expenditure on purchase of new items or for replacement, without any monetary ceiling.” Also, these CPSEs should not depend upon budgetary support or government guarantees.

A Navratna status imparts enhanced financial and operational freedom to a company and empowers it to invest up to Rs 1,000 crore or 15 per cent of its net worth on a single project without seeking government approval.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.