Bharat Heavy Electricals Ltd. and Steel Authority of India Ltd. have been placed under a one-year review period by the Centre after failing to meet the profitability criterion required for Maharatna status. According to The Economic Times, the government review found both companies falling short of the ₹5,000 crore average annual profit after tax (PAT) threshold during the preceding three years, despite meeting turnover and net worth norms. If their financial performance does not improve during the review period, the two public sector undertakings could be downgraded to Navratna status, reducing the autonomy currently available to their boards. The recommendation was made by a committee headed by Cabinet Secretary TV Somanathan as part of a broader review of CPSEs, with the panel reviewing the Maharatna framework and recommending stricter financial and governance standards. As per ET Now, this marks the first case of Maharatnas being put on notice with the threat of a status downgrade, with both companies being the only entities among the total 14 Maharatna companies to fall short of necessary parameters.
Bharat Heavy Electricals Ltd. shares climbed 2.86% on Friday, reaching ₹400.35 intraday following the announcement of a significant contract win. According to reports from Zee News, the stock has demonstrated strong momentum with a 55.75% gain over the last 12 months and 36.55% year-to-date performance in 2026. The stock showed robust trading activity with total traded volume at 19.19 times its 30-day average, while the relative strength index stood at 44.17.
The state-owned company secured an order worth over ₹21,000 crore (excluding GST) from Meja Urja Nigam Pvt Ltd (MUNPL) for the 3x800 MW Meja supercritical thermal power project Stage-II in Prayagraj, Uttar Pradesh. As reported by Zee News, the contract covers the engineering, procurement and construction (EPC) package, including design, engineering, manufacturing, supply, construction, erection, testing and commissioning works. The project will add 2,400 MW of supercritical thermal power generation capacity at Meja in Prayagraj district of Uttar Pradesh. The contract was awarded through an international competitive bidding process and is scheduled for completion within 70 months from the date of award notification, translating to nearly six years for project completion.
The review has prompted a wider examination of the Maharatna eligibility framework, with representatives of NITI Aayog telling the committee that the turnover, net worth and profitability thresholds were fixed in 2010 and have not been revised to reflect current market conditions. The committee has asked the Department of Public Enterprises (DPE) to revisit the eligibility criteria by indexing them to 2025 prices, after which all CPSEs may be reassessed under the revised framework. A downgrade would significantly curtail the companies' financial powers, as Maharatna firms can make equity investments of up to ₹5,000 crore without prior government approval, while the limit for Navratna companies is ₹1,000 crore. In BHEL's case, NITI Aayog has flagged human resource policies as a major constraint on growth and called for a comprehensive review. According to ET Now, the committee carried out a re-evaluation of central public sector enterprises (CPSEs) and proposed several measures to enhance performance, including enforcing stricter financial metrics, implementing tighter corporate governance requirements, and introducing the option to strip a CPSE of its 'Ratna' tag.
In terms of a turnaround strategy, the ministries of heavy industries and steel have been directed to deliver a comprehensive roadmap outlining how BHEL and SAIL could tackle issues such as weak financial performance including low profitability. During the assessment, the steel ministry highlighted that SAIL's average annual turnover had comfortably exceeded ₹1 lakh crore over the last four years, with an average net worth of ₹53,976 crore. The last time SAIL met the mandatory three-year average annual PAT threshold of ₹5,000 crore was in the 2022-23 fiscal year. Meanwhile, NITI Aayog flagged BHEL's human resource policies as "a major constraint" hampering its growth and said those required a comprehensive examination. In response, a heavy industries ministry official assured the panel that "a plan has been put in place for improving BHEL's financial performance".
