The Government of India categorizes Central Public Sector Enterprises (CPSEs) under three categories of Navratna, Miniratna and Maharatna.

This categorization is based on the factors such as turnover, net worth and net profit on the annual basis and the presence of the company in the stock exchange as per the Securities and Exchange Board of India (SEBI) rules.

The Government of India in the year 1997, gave the status of Navrtana to 9 CPSEs, as to give them more power and autonomy to compete in the global market so as to “support [them] in their drive to become global giants”. The status enables the company to invest up to certain
limits without prior permission from the government. Presently there are 16 CPSEs having the Navratna status.

The following are the conditions to get Navratna PSU status:

1. The company must have the status of Miniratna Category – 1.
2. It should have four independent directors in its board of directors.
3. The company must obtain the score of 60 or above on various parameters like net profit, net worth, total manpower cost, a total cost of production, cost of services, capital employed, profit before interest and taxes to turnover, inter-sectoral performance and earnings per share etc.

The third or last category of CPSEs or PSEs is the Miniratna PSU while Maharatna and Navratna being first and second. In 1997, the government chose to give more autonomy and control of financial matters to some profit-making public sector companies subjected to some eligibility conditions and guidelines to keep them competitive, efficient and effective. They can set up subsidiary companies, can enter into joint ventures and can set up the overseas office.

There are two categories within Miniratna PSU, Category I and  Category II

1. Category I CPSEs: These are the companies which have made profit continuously in the last three years, have made a net profit of Rs. 30 crores or more in one of the three previous years. This category can invest capital expenditure up to Rs. 500 crores or equal to its net worth
or which is less without the previous permission of the government.

2. Category II CPSEs should have made profits in the three consecutive years and have a positive net worth.

NAVRATNA COMPANIES IN INDIA- There are 16 Navratna CPSEs as following:

1. Bharat Electronics Limited (BEL)
2. Container Corporation of India Limited
3. Engineers India Limited
4. Hindustan Aeronautics Limited
5. Hindustan Petroleum Corporation Limited
6. Mahanagar Telephone Nigam Limited
7. National Aluminium Company Limited
8. National Buildings Construction Corporation Limited
9. NMDC Limited
10. Neyveli Lignite Corporation Limited
11. Oil India Limited
12. Power Finance Corporation Limited
13. Power Grid Corporation of India Limited
14. RashtriyaIspat Nigam Limited
15. Rural Electrification Corporation Limited
16. Shipping Corporation of India Limited