The Ministry of Corporate Affairs (MCA) has officially redefined the turnover thresholds for classification of public companies, in a move aimed at modernizing regulatory benchmarks and improving the precision of corporate categorization under the Companies Act, 2013. Effective from August 1, 2027, the updated norms are designed to reflect the evolving scale of Indian businesses and ensure that regulatory oversight is proportionately applied to larger public enterprises with greater public interest exposure.

As per the revised criteria, any company with a turnover exceeding ₹500 crore in the immediately preceding financial year will now be mandatorily classified as a large public company, subject to enhanced compliance requirements. This is a significant increase from the earlier threshold of ₹250 crore. These companies will be required to adhere to stricter norms for board independence, CSR expenditure, internal audits, ESG disclosures, and quarterly financial filings. Companies with turnover below ₹500 crore but above ₹100 crore will be categorized as medium public companies, while those below ₹100 crore will retain standard public company status with relatively lighter compliance obligations.

Additionally, companies that breach the new turnover threshold for two consecutive years will be automatically reclassified, and the MCA will update its internal compliance grading on the MCA21 portal to reflect the change. Companies must update their status in annual filings using the revised Form MGT-7A and Form AOC-4X. Experts view this redefinition as a timely and necessary update, expected to ensure better risk-based supervision, reduce unnecessary compliance for smaller firms, and streamline enforcement by focusing regulatory resources on larger and systemically significant corporate entities in the public domain.