Unveiling Miniratna gems: Three companies delivered over 200% return; do you own any?

Miniratna Companies in India represent a distinct category of public sector enterprises, distinguished by a level of autonomy in their operations and decision-making. These companies are categorized according to their financial performance and are granted a higher degree of flexibility and independence in comparison to other public sector units.

CPSEs are divided into several categories, including Maharatna companies, Navratna companies, and Miniratna companies. In this article, we will explore only the Miniratna companies listed in the Indian market and their historical stock performance.

The criteria for granting Miniratna status to Central Public Sector Enterprises (CPSEs) is categorized into two tiers.

For Miniratna Category-I status, CPSEs must demonstrate a consistent profit over the past three years, with a pre-tax profit of at least Rs. 30 crores in at least one of those three years, and maintain a positive net worth.

On the other hand, for Miniratna Category-II status, CPSEs need to show a continuous profit for the last three years and maintain a positive net worth.

In addition to these financial criteria, Miniratna CPSEs are also required to have a clean track record, meaning they should not have defaulted on loan repayments or interest payments owed to the Government. Furthermore, these entities should operate independently and should not rely on budgetary support or government guarantees for their financial stability. These criteria serve as a benchmark for the selection and eligibility of CPSEs to attain Miniratna status.

A total of seventy-three companies have been designated with Miniratna status, with sixty-one falling into Category 1, and the remaining twelve categorized under Category 2.

Furthermore, among these seventy-three companies, many are not publicly listed on the stock market. In this article, we will focus exclusively on those that are publicly traded. Consequently, there are twenty-four listed companies designated with Miniratna status, and we will analyze the historical returns generated by these companies over both the past three months and the last one-year period.

Based on the data, IRFC, a prominent railway financing company, has stood out as the top performer, delivering an impressive multibagger return of 215% to its investors in the past year. Ircon International secured the second position on the list, with a substantial return of 214% during the same period.

In contrast, IRCTC Limited failed to meet its investor’s expectations during the same time frame, as the stock recorded a negative return of 12% over the past year.

Investors should keep an eye on the stocks of these Miniratna companies.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.