Multi-bagger HAL surges 2% on getting 'Maharatna' status
Shares of Hindustan Aeronautics Limited (HAL) rose 2% today, hitting a day's high of ₹4,545.90 on the BSE. The surge came after Finance Minister Nirmala Sitharaman approved HAL's upgrade to Maharatna Central Public Sector Enterprise (CPSE) status on Saturday. The Department of Public Enterprises announced the upgrade in a social media post, saying, "The Finance Minister has approved the upgradation of Hindustan Aeronautics Limited (HAL) to 14th Maharatna CPSE."
HAL's financial performance and Maharatna eligibility
HAL, a Department of Defence Production (DoDP) CPSE, had an annual turnover of ₹28,162 crore and a net profit of ₹7,595 crore for FY 2023-24. To qualify for Maharatna status, a CPSE must fulfill six essential criteria. These include holding Navratna status, being listed on the Indian stock exchange with the minimum public shareholding as per SEBI regulations, and having an average annual turnover of over ₹20,000 crore over the last three years among others.
Maharatna status grants HAL increased autonomy
The Maharatna status gives HAL greater operational and financial autonomy. It now has the liberty to invest up to 15% of its net worth in projects and up to ₹5,000 crore in foreign ventures without government approval. The new status also allows greater flexibility for mergers, acquisitions, and capital expenditure, free from many restrictions imposed on lower-tier PSUs.
HAL's market performance and Maharatna peers
HAL's shares have surged 57% in 2024 so far and 275% in the last two years. The company has a market capitalization of ₹2,97,394 crore. With this upgrade, HAL becomes one of the 14 "Maharatna" public sector undertakings (PSUs), including big names like BHEL, BPCL, and Coal India among others.
