The fascination for titles runs high in the government setup. So the government decided to categorise companies run by it on the basis of their networth, turnover and profits. They were thus called Maharatnas, Navaratna and Mini-Ratnas. Four companies; Indian Oil Corporation, NTPC, ONGC and Steel Authority turned Mahartna in May 2010, and Coal India joined later in April 2011.
In February this year, two companies, GAIL and BHEL joined the elite Maharatna category to take the total number to seven. We undertook the exercise of evaluating the performance of the largest and most prestigious government-promoted companies to see how they have fared since the time they were awarded these epithets. To compare their performance we took 13 similar companies from the private sector which would have qualified as Maharatnas. We invested Rs 10,000 each month in both Maharatnas and the Private Ratnas, and equally divided the amount among the companies.
Making of a Maharatna
* Listed on the Indian stock exchange, with a minimum prescribed public shareholding of 10 per cent
* Average annual turnover of more than Rs 20,000 crore in the past three years
* Average annual net worth of more than Rs 10,000 crore in the past three years
* Average annual net profit of more than Rs 2,500 crore in the past three years
* Significant global presence or international operations