Maharatna, Navratna & Miniratna Status of CPSEs: NPCC is now a Miniratna

The Union Government on November 27, 2018 conferred the ‘Miniratna status: Category –I’ on the National Projects Construction Corporation Limited (NPCC).

The empowerment of Miniratna Status will help NPCC in taking speedy decisions by enhancing the delegation of powers to the Board.

NPCC has also been awarded with the ISO 9001:2015 Certification.

National Projects Construction Corporation Limited

• National Projects Construction Corporation Limited (NPCC), a schedule ‘B’ Central Public Sector Enterprise (CPSE) under the administrative control of Ministry of Water Resources, was incorporated in 1957.

• It is a premier construction company having mandate with creation of infrastructure to provide impetus for economic development of the country.

• The Corporation is making continuous profit since 2009-10, having positive networth for the last six years and has ambitious business plan with enhanced order book position of Rs 11833 crore.

Department of Public Enterprises: Nodal Government Agency for granting status to CPSEs

• The Public Sector Enterprises are run by the Government under the Department of Public Enterprises (DPE) of Union Ministry of Heavy Industries and Public Enterprises.

• The Department of Public Enterprises is the Nodal Government agency to issue guidelines and regulation for the various state-owned CPSEs in India.

• The DPE also makes policies and guidelines for the performance evaluation and improvement of the PSUs/ CPSEs.

• The government grants the status of Maharatna, Navratna, and Miniratna to Public Sector Undertakings (PSUs) and Central Public Sector Enterprises (CPSEs) based upon the profit made by these enterprises.

• The Maharatna, Navratna and Miniratna statuses give financial and administrative power to the companies to a certain extent.

• The Maharatna category has been the most recent one, created in 2009, while the other two have been in function since 1997.

• Apart from these, PSUs in India are also categorised based on their special non-financial objectives and are registered under Section 8 of Companies Act, 2013.

Total number of Maharatna, Navratna and Miniratna PSEs

As on August, 2018, there are 8 Maharatnas, 16 Navratnas and 60 Miniratna Category - I and 15 Miniratna Category - II Public Sector Enterprises (PSEs). There are nearly 300 CPSEs in total.

Maharatna Status of CPSEs

In 2009, the Union Government established the Maharatna Status. The Maharatna Company Board has the highest authority in the matter of finance and investments.

Eligibility criteria

The CPSEs shall fulfill the following eligibility criteria to be considered for grant of Maharatna status:

• Should already hold the Navratna status

• Should be listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations

• Average annual turnover of more than Rs 25000 crore during the last 3 years

• Average annual net worth of more than Rs 15000 crore during the last 3 years

• Average annual net profit after tax of more than Rs 5000 crore during the last 3 years

• Should have significant global presence or international operations

Investment ceiling

Maharatna Status raises a company's investment ceiling from Rs 1000 crore to Rs 5000 crore. The Maharatna firms can decide on investments of up to 15 percent of their net worth in a project.

Navratna status of CPSEs

Eligibility criteria

The CPSEs shall fulfill the following eligibility criteria to be considered for grant of Navratna status:

• Must have ‘Miniratna Category – I’ status along with a Schedule ‘A’ listing.

• Should have obtained ‘excellent’ or ‘very good’ rating under the Memorandum of Understanding at least thrice in the last five years of operations

• Should have a composite score of 60 or above out of possible 100 marks in the 6 selected performance parameters:-

1. Net profit to net worth
2. Manpower cost to total cost of production/services
3. Profit before depreciation, interest and taxes to capital employed
4. Profit before interest and taxes to turnover
5. Earnings per share
6. Inter-sectoral performance

Investment ceiling

Navratna Status allows the companies to invest up to Rs 1000 crore or 15 percent of their net worth on a single project or 30 percent of their net worth in the whole year (not exceeding Rs 1000 crores).

Miniratna Status of CPSEs

Eligibility criteria

• The CPSEs which have made profits in the last three years continuously and have positive net worth are eligible to be considered for grant of Miniratna status.

• The Miniratnas are divided in two categories – I and II.

1. Category I: Miniratnas that have made profits for the last three years continuously or earned a net profit of Rs 30 crores or more in one of these three years. There are 60 such companies.
2. Category II: Miniratnas that have made profits continuously for the last three years and must have a positive net worth. There are 15 such companies in this category.

Investment ceiling

The Miniratna Category - I PSEs are allowed to invest up to Rs 500 crore or equal to their net worth, whichever is lower. The Miniratna Category - II PSEs can invest up to Rs 300 crore or up to 50 percent of their net worth, whichever is lower.