What is the definition of a Navratna company in India?
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Simply put, Navratna company meanings talk about those companies that have been bestowed the status of Navratna.
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To begin with, Navratan company is a recognised Public Sector Undertaking that has been showcasing impressive financial numbers. The concept is unique to India and there are several Navratna companies like Bharat Heavy Electronics Limited (BHEL) and Hindustan Aeronautics Limited (HAL). These companies enjoy special status and play a major role in the country’s economic growth.
In this article, we will talk about everything you should know about Navratan companies in India. Read on.
A public sector undertaking that has been granted the ‘navratna’ status is a Navratna company. Navratna companies in India play a role in helping the country’s economic status grow significantly and for this, these companies are also provided with benefits like tax exemptions, zero clearance for investing up to certain limits and many more.
Take a look at this Navratna Company list:
Engineers India Limited
Container Corporation of India Limited (CONCOR)
Bharat Heavy Electronics Limited
Hindustan Aeronautics Limited (HAL)
Neyveli Lignite Corporation Limited (NLC India)
Rashtriya Ispat Nigam Limited (RINL)
Rashtriya Chemicals & Fertilisers Limited (RCF)
Mahanagar Telephone Nigam Limited (MTNL)
National Buildings Construction Corporation Limited (NBCC)
National Aluminium Company Limited (NALCO)
National Mineral Development Corporation Limited (NMDC)
Rail Vikas Nigam Limited (RVNL)
Shipping Corporation of India Limited (SCI)
ONGC Videsh Limited (OVL)
RITES Limited
IRCON International Limited
Here’s an overview of some of the Navratna companies in India that will give you a better insight:
Bharat Heavy Electronics Limited (BHEL)
BHEL is the country’s most reliable source for providing electronic equipment. Established in the year 1954, BHEL’s defence portfolio includes navigation, communication, warfare and more and for the non-defence sector, they help with cyber security, civilian radars and more.
Hindustan Aeronautics Limited
Established in 1940, HAL deals with the development, design, manufacture and supply of military and commercial aircraft. Additionally, they also provide accessories for aircraft, helicopters etc.
Engineers India Limited
EIL specialises in technology, pre-front and engineering design, and supply chain management which has been helping India grow its engineering construction and project management. Recently they have introduced projects to reflect their commitment to sustainable development in the field, as well.
Neyveli Lignite Corporation Limited (NLC)
NLC India has been single-handedly managing the generation of renewable energy and coal and lignite power along with managing open-pit lignite mines. They currently stand at 50.1 MTP mining capacity which is the backbone of the country's renewable energy source. 1
Container Corporation of India Limited (CONCOR)
CONCOR deals with both national and international services for logistics for container freight stations and dry ports. In addition, their services also include air cargo movement, LCL Hub services, bonded warehousing, container repair movement and more.
Navratna companies in India while delivering special services and supporting the country’s economic growth, enjoy special benefits like: 2
A Navratna company can legally create subsidiaries abroad, and develop alliances. In addition, they can also participate in joint ventures.
A Navratna company in India is free to invest 30% of their net worth annually. However, the amount should not exceed ₹ 1000 crores.
Being a Navratna company, they don’t need clearance to invest up to ₹1,000 crores.
A company to gain the status of Navratna company has to meet certain eligibility criteria including:
The company must hold a Miniratna status.
The company must be listed in Schedule A of CPSEs.
The company must have received impressive ratings in at least three out of the last five years, under the Memorandum of Understanding System.
The company must meet certain criteria in 6 key areas: net income, net profit, gross margin, manpower cost to cost of production or services, gross profit as turnover, and earnings per share.
The company must have a score of at least 60 in the following areas:
Parameter | Maximum Weight |
Earnings Per Share | 10 |
Profit before interest and taxes (PBIT) to turnover | 15 |
Net profit to net worth | 25 |
Profit before depreciation, interest and taxes (EBITDA) to capital employed | 15 |
Manpower cost to total cost of production or services | 15 |
Inter-sectoral performance | 20 |
Note- The eligibility criteria might change each financial year, so make sure to check the updated list from the government's official website.
Navratna companies in India have been the backbone of India’s growth and development. In addition to pushing economic growth, they have contributed significantly to the country’s energy, communication, commute etc development.
Economic Contributions
Navratna Companies have made significant contributions in pushing Indian economic growth. Their profit margins have been expanding year after year and the stock market trends reflect promising opportunities for investors, as well. For instance- BHEL made a consolidated profit of ₹658 crores in FY 2023. 3
National Development
Navratna companies like BHEL, HAL, EIL etc have paved the way for India to become a potential superpower. Their contribution to bringing innovation in fields like energy, communication, aviation and engineering has helped the country create a strong foot on the world map.
Sustainable Development
The world today is marching towards sustainable development to secure the future and Navratna companies in India have jumped on the wagon, as well. For instance, NEYVELI Lignite’s water treatment plant and land reclamation in Tamil Nadu are golden examples of sustainable development. 4
Navratna companies in India are the backbone of the country’s energy, communication, aviation, transport, engineering and many more. They have been promoting innovative technology to help the country stand on par with the superpowers around the globe and for this, the government provides them special status like financial autonomy and free management of their capital expenditure.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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Simply put, Navratna company meanings talk about those companies that have been bestowed the status of Navratna.
To classify as a Navratna company, a company has to meet certain criteria like a miniratna status, outstanding ratings in Memorandum of Understanding Systems, and clearance in areas like net worth, net income, gross income etc.
At present, there are 16 Navratna companies in India.
A Navratna company in India enjoys financial autonomy like a clearance to invest up to ₹1,000 crores in a single financial year, create subsidiaries abroad, invest in joint ventures etc.
There are 16 Navratna companies in India including Engineers India Limited, Container Corporation of India Limited, Bharat Heavy Electronics Limited, Hindustan Aeronautics Limited and Neyveli Lignite Corporation Limited.
The key difference between them lies in their investing capacity. A Maharatna company can invest up to ₹5,000 crores, a Navratna company can invest up to ₹1,000 crores and a Miniratna company can invest up to ₹500 crores from their profits in one financial year. 5
A Navratna company that continues to show poor financial performance in terms of sales, growth, profitability and ROI can lose its Navratna status.
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