Hindustan Aeronautics Limited (HAL) is expected to be upgraded to the Maharatna category from its existing Navratna status among Central Public Sector Enterprises (CPSEs) by December 2024, according to a Business Standard report.

What Happened: A senior finance ministry official revealed that the upgrade would provide HAL’s board with greater operational and financial independence, the publication said. This would allow the board to invest up to ₹5,000 crore in projects without requiring government approval, a considerable increase from the ₹1,000 crore limit for Navratna CPSEs.

The anonymous official stated, “There is huge scope for upgrading HAL into the Maharatna category. The apex committee (group of secretaries) has done all the formalities for it. It is almost at the final stage and we are expecting it to be finalised by the end of this year.”

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Currently, India has 13 Maharatna CPSEs and 25 Navratna CPSEs. The finance ministry upgraded Oil India to the Maharatna category in August 2023.

Earlier this month, HAL inked a ₹26,000 crore contract with the defence ministry for contract with the defence ministry for the manufacture of 240 AL-31FP Aero Engines for Su-30MKI aircraft.

Furthermore, HAL has been a top pick among brokerages following the government’s approval of ₹1.44 lakh crore defence procurements. The Defence Acquisition Council (DAC) has sanctioned significant procurements for the Indian Armed Forces, which is likely to reduce market concerns about the lack of orders in the defence sector.

Price Action: HAL’s share price was up 0.21% to trade at ₹4,651.50 shortly after market open on Friday.

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