Railtel, SJVN, NHPC get 'Navratna' status from Finance Ministry, shares jump up to 5%

The Ministry of Finance conferred 'Navratna' status to four Central public sector enterprises-Railtel Corporation of India, SJVN, Solar Energy Corporation, and NHPC-with effect from August 30. Granted to companies with past classification as 'Miniratna' Category I, the Navratna upgrade is a prestigious recognition for exemplary financial and market performance. This addition takes the number of Navratna CPSEs in the country to 25.

Of the three newly minted Navratna companies, three-Railtel, SJVN and NHPC-are listed, and their shares jumped in a big way after the announcement. On September 2, shares of Railtel and SJVN rose over 5 per cent, while NHPC stock jumped 4.5 per cent in early trade.

This Navratna status entitles these companies to wider financial autonomy to invest in any project, without seeking the government's approval, up to Rs 1,000 crore. They can invest even more, allocate up to 15 per cent of their net worth in a project or 30 per cent of their net worth over the entire year, provided the investment does not exceed Rs 1,000 crore.

This upgrade has benefited Railtel Corporation, which has reported a 25.2 per cent year-on-year increase in net profit at Rs 48.7 crore for the quarter ending June 2024. SJVN also reported a 31 per cent rise in consolidated net profit at Rs 357.09 crore for the said period, while the same for NHPC edged up by 1.2 per cent to Rs 1,108.5 crore.

Consequently, shares of these companies gained optimism from investors. Railtel reached a high of Rs 515.60, SJVN Rs 140, and NHPC Rs 100.50 during the day on the BSE. This only adds to the strong performance over the last one year: shares of Railtel have surged 108 per cent, SJVN by 117 per cent and NHPC by 97 per cent.

The last PSU to get the Navratna status is Mazgaon Dock, and these four companies are thus the 22nd, 23rd, 24th, and 25th enterprises to get this distinction.