Hindustan Aeronautics shares surged over 2% to an intra-day high of Rs 4,544.80 after finance minister Nirmala Sitharaman approved Maharatna status to HAL. The company has become the 14th PSU to join the elite group.
What does this mean to the company?
The Maharatna status is a distinguished title awarded to certain Central Public Sector Enterprises (CPSEs) in India. It represents the highest honour among CPSEs and is conferred upon companies that fulfil rigorous financial and additional requirements. This is significant because public enterprises need a lot of government permission at every step, slowing operational efficiency. So, some companies are given ratna status for operational and decision-making freedom.
“Hon’ble Finance Minister has approved the upgradation of Hindustan Aeronautics Limited (HAL) to 14th #Maharatna CPSE. The proposal has earlier been recommended by the Inter-Ministerial Committee (IMC) headed by the Finance Secretary and the Apex Committee headed by the Cabinet Secretary. HAL is a Department of Defence Production (DoDP) CPSE with an annual turnover of Rs. 28162 crore and net profit of Rs. 7595 crore for FY 2023-24,” said the Department of Public Enterprises in a tweet.
HAL Vs Nifty 50
Shares of HAL have delivered 7% returns in the past five days. However, on comparing the monthly performance, the stock has declined 2% in the last one month. In a 6-month period, it has gained 24% and is up 60% year to date. HAL has given a return of 130% in the last one year.
To compare, the benchmark index Nifty 50 has given a return of 1% in the past five days. However, it has fallen over 1% in the last one month. The index has risen 13% in the last six months and over 15% from year to date. It has raised investors’ money by 27% in the last one year.
Hindustan Aeronautics (HAL) is an Indian public-sector aerospace and defence company. It is headquartered in Bangalore. The company commenced its operations in December 1940 and is one of the world’s oldest and largest aerospace and defence manufacturers.