IREDA gets ‘navratna’ status: What it means for the PSU

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian Renewable Energy Development Agency Ltd (IREDA) has been granted ‘navratna status’ by the Department of Public Enterprises.

#NewsFlash | IREDA granted ‘Navratna Status’ from department of public enterprises pic.twitter.com/LxvfMYYaEa

— CNBC-TV18 (@CNBCTV18Live) April 26, 2024

IREDA’s January-March quarter earnings showed improved margins and better asset quality.

The PSU’s net profit increased by 32% year-on-year, while remaining flat quarter-on-quarter at ₹337 crore.

For the March quarter, IREDA’s assets under management (AUM) grew by 26.8% from last year to ₹59,698 crore. Even when compared to the December quarter, the AUM growth stood at 18%.

IREDA’s share price closed 2.2% higher today (April 26), settling at ₹170.95 on the NSE. So far this year, IREDA shares have given over 63% return, while the one-year return on the stock is 184%.

IREDA made its stock market debut on November 29, 2023, surging 87% from its issue price, making it one of the most successful listings of the year.

IREDA provides financial support to projects generating electricity through new and renewable resources. The government has a 75% stake in the company.

Incorporated in March 1987, IREDA is a ‘miniratna’ public limited government company, administratively controlled by the Ministry of New and Renewable Energy (MNRE).

What is a navratna status and how it is accorded?

The Indian government accords the navratna status to top-tier public sector undertakings (PSUs) and these organisations are authorised to undertake substantial investments of up to ₹1,000 crore without needing approval from the Centre.

These companies have the liberty to invest up to 30% of their net worth within a year, as long as it stays below ₹1,000 crore. They can also engage in joint ventures, form alliances, and establish subsidiaries abroad.

For a company to be accorded navratna status, it should already hold the miniratna category I status and be listed under Schedule A of CPSEs.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow