PSU Stock Update: Meet the two new ‘Navratna’ companies of India

The Department of Public Enterprises, on Monday, March 3, said it has approved the upgradation of Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) to ‘Navratna’ Central Public Sector Enterprise (CPSE) from their earlier rating of ‘Miniratna’.This makes them the 25th and 26th Navratna companies among CPSEs. IRCTC is a CPSE of the Ministry of Railways with an annual turnover of ₹4,270.17 crore, profit after tax of ₹1,111.26 crore and a net worth of ₹3,229.97 crore for FY24, the department of public enterprises said.
IRFC too is a Ministry of Railways CPSE with an annual turnover of ₹26,644 crore, profit after tax of ₹6,412 crore and a net worth of ₹49,178 crore for FY24, the department added.
What is a Navratna CPSE?India’s CPSEs are classified into three major categories — Miniratna, Navratna and Maharatna CPSEs.
The aim of assigning the ‘ratna’ status to CPSEs is to give operational freedom and decision-making power to state-run entities. They can make decisions on investments and new projects without approaching the government until a particular threshold.Navratna-status companies are required to have a Miniratna-I status. The CPSEs that have reported profits in three consecutive years, have a pre-tax profit of ₹30 crore or more in at least one of the three years, and have a positive net worth are classified as a Miniratna-I PSU.

Apart from the Miniratna-I status, PSUs that have obtained an “Excellent” or “Very Good” MoU rating in three out of the last five years and have a composite score of 60 or more in six selected performance indicators are eligible to be considered for a “Navratna” upgrade. The six parameters are — net profit to net worth, manpower cost to total cost of production, PBDIT to capital employed, PBIT to turnover, earnings per share and inter-sectoral performance.

Bharat Electronics, NBCC, Engineers India, are some of the existing Navratna PSUs.

IRCTC shares were trading 0.85% higher at ₹676.65 apiece, while IRFC shares were down 1.09% at ₹111.23 apiece at 3.05 pm on Monday, March 3.

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