Navratna Companies are a group of highly prestigious public-sector enterprises in India. These companies are known for their exceptional performance and contribution to the Indian economy. They possess significant financial autonomy and have the authority to make investment decisions without seeking government approval for projects up to a certain limit.
Recently, two CPSE were given prestigious 'Navratna' status by the Ministry of Finance, bringing the total count of Indian Navratna companies to 16. IRCON, which is a leading turnkey construction company, and Rites, which is a multidisciplinary engineering and consultancy organization.
|List of Navratna Companies in India|
|S. No.||Central Public Sector Enterprises|
|1||Bharat Electronics Limited|
|2||Container Corporation of India Limited|
|3||Engineers India Limited|
|4||Hindustan Aeronautics Limited|
|5||Mahanagar Telephone Nigam Limited|
|6||National Aluminium Company Limited|
|7||National Buildings Construction Corporation Limited|
|8||Neyveli Lignite Corporation Limited|
|10||Rashtriya Ispat Nigam Limited|
|11||Shipping Corporation of India Limited|
|12||Rail Vikas Nigam Limited|
|13||ONGC Videsh Ltd|
|14||Rashtriya Chemicals & Fertilizers Limited|
|15||Ircon International Ltd|
Under how many categories are Central Public Sector Enterprises (CPSEs) divided?
The Government of India categorizes Central Public Sector Enterprises (CPSEs) under three different categories, based on different criteria: Maharatna, Navratna, and Miniratna. A wide range of factors determine the categorization including annual turnover, net worth, and net profit calculated on an annual basis.
What are benefits for Navratna Company of India?
- CPSE are defined in various categories, and they enjoy certain benefits on various fronts. Once a company fulfills the eligibility criteria for becoming a Navratna, it can get some investment benefits. The benefits that such companies get are as follows:
- Greater financial and operational autonomy compared to those of Miniratna status.
- Navratna companies get the privilege of investing up to 15%, or Rs. 1,000 crore, of their total net worth on a single project without the approval of the government.
- Navratna companies have the freedom to make investments up to 30% of their net worth within a year, as long as they do not exceed Rs. 1000 crore.
- Navratna companies possess the flexibility to enter into joint ventures, establish alliances, and establish subsidiaries abroad.
Eligibility Criteria of Navratna Companies
Now comes the eligibility, under which criteria CPSE are granted the Navratna status. As per circular by Ministry of Heavy Industries, a public sector enterprise must fulfill certain eligibility criteria.
- The company should already have Miniratna Category I status and be listed under the Schedule A listing of Central Public Sector Enterprises.
- The Miniratna category company should have obtained an ‘excellent’ or 'very good’ rating under the Memorandum of Understanding system in three of the last five years and have a composite score of 60 or above in the six selected performance parameters, namely,
- Net profit to net worth
- Manpower cost to the total cost of production or services,
- Profit before depreciation, interest, and taxes on capital employed,
- Profit before interest and taxes on turnover,
- Earnings per share and
- Inter-sectoral performance
- Lastly, the company is required to have at least four independent directors on its board of directors.
Both the stocks made gap up opening and trading at healthy gain of more than 5%.
|IRCON INTERNATIONAL||FY 2023||FY 2022||FY 2021||FY 2020||FY 2019|
|Profit after Tax (PAT)||765.23||592.34||391.06||485.31||450.07|
|Operating Profit Margin (%)||9.42||9.45||10.96||12.41||12.86|
|Net Profit Margin (%)||7.38||8.02||7.32||9||9.37|
|RITES||FY 2023||FY 2022||FY 2021||FY 2020||FY 2019|
|Profit after Tax (PAT)||542.04||516.37||432.38||616.1||469.51|
|Operating Profit Margin (%)||29.67||27.86||32.13||35.3||35.61|
|Net Profit Margin (%)||20.62||19.39||23.25||24.89||22.93|