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The Indian Renewable Energy Development Agency Limited (IREDA) has been accorded the ‘Navratna’ status by the Finance Ministry’s Department of Public Enterprises. This status was awarded to IREDA, a public sector undertaking (PSU), after it reported a robust performance in the quarter ending March 31, 2024. Earlier, IREDA was a Mini Ratna (Category – I) organisation.
IREDA is a government-owned entity under the administrative control of the Ministry of New and Renewable Energy (MNRE). It was established in 1987 as a non-banking financial company (NBFC) to provide financial assistance for projects related to renewable energy and energy efficiency/conservation. IREDA was established in 1987 and Government has 75% ownership in IREDA.
Benefits of Navratna Status
With the Navratna status accorded to IREDA, the PSU is now granted certain benefits and autonomy. It can make investments up to ₹1,000 crore in a fiscal year without prior approval from the central government. This level of autonomy is only extended to top-tier state-owned companies.
A PSU with the Navratna tag is allowed to invest up to 30% of its net worth within a financial year, provided it does not exceed the ceiling of ₹1,000 crore. Additionally, Navratna firms are permitted to enter into joint ventures, form pacts, and establish subsidiaries offshore.
Criteria for Navratna Status
The Navratna tag is achieved by central public sector undertakings that have obtained an “excellent” or “very good” rating under the Memorandum of Understanding system in three of the last five years. They should also have a composite score of 60 or above in six selected performance parameters, including net profit to net worth, manpower cost to total cost of production/services, profit before depreciation, interest and taxes to capital employed, profit before interest and taxes to turnover, earning per share, and inter-sectoral performance.
Financial Performance of IREDA
IREDA reported a 32% year-on-year surge in net profit at ₹337 crore in the fourth quarter of the fiscal year 2023-2024. Its assets under management (AUM) also grew to ₹59,698 crore, marking a 37% increase from the year-ago quarter.
Stock Performance
