On April 26, the Government of India’s Department of Public Enterprises accords “Navratna” status to the Indian Renewable Energy Development Agency (IREDA).
Why was the status granted?
Earlier this month, IREDA released its impressive and strong Q4 results 2024 (January-March quarter earnings). The state-owned company also showed improved margins and better asset quality.
The company reported a net profit of ₹337.37 crore in Q4FY24, logging a year-on-year growth of 32% against the company’s net profit in Q4FY23, while remaining flat quarter-on-quarter at ₹337 crore.
It reported year-on-year growth of 44.83 per cent in PAT (Profit After Tax) and climbed to an all-time high of ₹1252.23 crore.
For the March quarter, IREDA’s assets under management (AUM) grew by 26.8% to ₹59,698 crore as compared to last year.
IREDA was regarded as one of the most successful listings of 2023 after it surged 89% from its issue price. The company made its stock debut on November 29, 2023.
On Friday, its share price closed at 2.03 per cent higher at Rs 170.65. 
What is “Navratna” status?
Navratna companies stand out as the top tier among Public Sector Undertakings (PSUs) because of their remarkable financial and operational accomplishments. These organisations have the authority to undertake substantial investments up to ₹1,000 crore without needing approval from the Central Government.
What qualification does the status require?
Companies that have attained the Miniratna Category-I designation and are registered under Schedule A of Central Public Sector Enterprises (CPSEs).
It must have consistently received an outstanding rating under the Memorandum of Understanding System for at least three out of the last five years.
Additionally, the company needs to meet specific criteria across six key areas, including net profit to net worth, PBDIT to capital employed, gross margin as capital expenditure, manpower cost to cost of production or services, gross profit as turnover, and earnings per share.
What benefits does the status avail?
The need for the government’s approval to invest ₹1,000 crore or 15% of their net worth in a single project is no longer needed.
30% of the company’s net worth can be invested within a year as long as it stays below ₹1,000 crores.
Further, these companies are at liberty to engage in joint ventures, form alliances and establish subsidiaries overseas.
About IREDA
Incorporated in March 1987, IREDA, India’s largest pure-play green financing NBFC, is a ‘miniratna’ public limited government company administratively controlled by the Ministry of New and Renewable Energy (MNRE). It is engaged in promoting, developing, and extending financial assistance for setting up projects related
to new and renewable sources of energy and energy Renewable Sources, Energy Efficiency, and Environmental Technologies for sustainable development.”
It operates with a vision of “Expanding and transitioning renewable energy towards affordability, scalability, and establishing sustainability in the country.”
The government has a 75% stake in the company.
IREDA makes the total number of Navratna PSEs to 17.
