- June 6, 2026
BHEL, SAIL Might Lose ‘Maharatna’ Status: What It Means For These PSU Giants
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If the two public sector enterprises fail to improve their financial performance within the stipulated period, they could be downgraded to Navratna companies.
For BHEL, NITI Aayog reportedly flagged human resource policies as a major constraint to growth.
The Centre has placed two state-run giants, Bharat Heavy Electricals Limited (BHEL) and Steel Authority of India Limited (SAIL), on a one-year watchlist after they failed to meet key financial criteria required for retaining their Maharatna status, according to a report by the Economic Times citing official documents.
If the two public sector enterprises fail to improve their financial performance within the stipulated period, they could be downgraded to Navratna companies, marking the first such instance since the Maharatna classification was introduced.
Why Have BHEL And SAIL Been Put On Notice?
According to ET, both companies failed to satisfy the requirement of maintaining an average annual profit after tax (PAT) of more than Rs 5,000 crore during the previous three years.
While the companies continue to meet the other eligibility conditions, including average annual turnover above Rs 25,000 crore, net worth exceeding Rs 15,000 crore and having a significant international presence, their profitability has fallen short of the prescribed benchmark.
A committee headed by Cabinet Secretary T V Somanathan reviewed the performance of central public sector enterprises (CPSEs) and recommended placing BHEL and SAIL on notice, ET reported.
What Does Maharatna Status Mean?
Maharatna is the highest classification granted to central public sector enterprises. The status provides greater financial and operational autonomy to company boards, allowing faster investment decisions without seeking frequent government approvals.
Currently, India has 14 Maharatna CPSEs, including companies such as Oil and Natural Gas Corporation, Coal India Limited and Indian Oil Corporation.
What Happens If They Are Downgraded?
A downgrade from Maharatna to Navratna would reduce the financial powers available to the boards of BHEL and SAIL. Maharatna companies can independently approve equity investments of up to Rs 5,000 crore without seeking government clearance. In contrast, Navratna companies can approve investments only up to Rs 1,000 crore.
This means a downgrade could limit the ability of the companies to undertake large expansion projects, acquisitions or strategic investments without additional approvals from the government.
Government Tightening Oversight Of PSUs
The development comes amid a broader effort by the government to strengthen accountability and performance standards among state-owned enterprises.
According to ET, the Centre has already tightened annual performance evaluation norms for CPSEs. Companies can now face penalties for failing to meet corporate social responsibility (CSR) obligations, delaying payments to micro, small and medium enterprises (MSMEs), or not maintaining succession plans for senior management positions.
Officials quoted by ET said that “Ratna” status should not be viewed as permanent and that significant deviation from prescribed criteria could result in a downgrade.
Why Is The Government Reviewing The Criteria?
During the review process, representatives of NITI Aayog pointed out that the financial thresholds for Maharatna eligibility were fixed in 2010 and have not been adjusted to reflect inflation and changes in the size of the economy.
The committee has asked the Department of Public Enterprises (DPE) to revisit the eligibility criteria by indexing them to 2025 price levels and subsequently review all CPSEs under the revised framework, ET reported.
What Are BHEL And SAIL Doing To Improve Performance?
The ministries overseeing both companies have been directed to submit detailed plans to improve profitability and operational performance.
According to ET, the Steel Ministry informed the review panel that SAIL’s average annual turnover exceeded Rs 1 lakh crore during the last four years, while its average net worth stood at nearly Rs 54,000 crore. However, the company last met the three-year average PAT threshold of Rs 5,000 crore in FY23.
For BHEL, NITI Aayog reportedly flagged human resource policies as a major constraint to growth. The Heavy Industries Ministry informed the committee that a roadmap has already been prepared to strengthen the company’s financial performance.
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