Railway undertakings RITES Limited and IRCON get Navratna status

IRCON International Limited (IRCON) and RITES Limited (RITES), both Central Public Sector Enterprises (CPSEs) under the Ministry of Railways, have been declared as the 15th and 16th Navratna respectively among the Central Public Sector Undertakings (CPSEs).

• These enterprises of the Railway Ministry have been given Navratna status by the Union Finance Ministry on 12 October 2023.

RITES LTD (RITES):

• Entering its 50th year of incorporation, RITES Limited is a leading transport infrastructure consulting and engineering firm in India.
• It provides services in various sectors of transportation, railways, export of rolling stock, highways, airports, metros, urban engineering and sustainability, ports and waterways and energy management.
• The Navratna status will help RITES to further enhance its brand, compete more effectively in the global market and move forward more powerfully into new frontiers for growth.

IRCON International Limited (IRCON):

• IRCON's core competency in the 47th year is in railway, highway and extra high tension substation engineering and construction.
• The company has executed projects operated in the areas of Railway construction including ballast less track, electrification, tunnelling, signal & telecommunication as well as leasing of locos, construction of roads, highways, commercial, industrial & residential buildings and complexes, airport runway and hangars, metro and mass rapid transit system, etc. 
• IRCON has extensive operations in many states of India and other countries. The company has reported a consolidated annual turnover of Rs 10,750 crore and profit after tax of Rs 765 crore in the financial year 2022-23.

Benefits of getting Navratna status:

• By being granted “Navratna” status, companies will benefit in enhancing market credibility and undertaking large size PPP projects.

Central Public Sector Enterprises (CPSEs):

• Central Public Sector Enterprises (CPSEs) are companies in which the Central Government or other CPSEs hold a direct stake of 51% or more.
• CPSEs are classified into three categories namely: Maharatna, Navratna and Miniratna. At present there are: 10 Maharatna, 14 Navratna and 74 Miniratna CPSEs in the country.
• Maharatna Scheme for CPSEs was launched in May, 2010 to empower large CPSEs to expand their operations and emerge as global enterprises.
• The Navratna Scheme was launched in the year 1997 to identify those CPSEs that enjoy comparative advantages in their respective sectors and support them in their drive to become global enterprises.
• Miniratna Scheme was launched in the year 1997 in pursuance of the policy objective of making the public sector more efficient and competitive and providing greater autonomy and delegation of powers to profit making public sector enterprises.

What are the criteria for granting Maharatna status to a company?

• It should get Navratna status.
• The company must be listed on an Indian stock exchange with a minimum prescribed public shareholding under the regulations of the Securities and Exchange Board of India (SEBI).
• The average annual turnover during the last three years should be more than Rs 25,000 crore.
• The average annual net worth in the last three years should be more than Rs 15,000 crore.
• The average annual net profit of the last three years should be more than Rs 5,000 crore.
• Companies should have a significant presence in the international market in their business sector.
• Main Maharatna companies of the country: NTPC, Bharat Heavy Electricals Limited, Bharat Petroleum Corporation Limited, Coal India Limited, GAIL (India) Limited, etc.

What are the criteria for granting Navratna status to a company?

• CPSEs falling under Miniratna Category – I and Schedule 'A', which have obtained 'Excellent' or 'Very Good' rating under the MOU system in three of the last five years and have a score of 60 or more in six performance parameters Have obtained overall score.
• These six criteria are:

1. Net capital and net profit
2. Total cost of manpower relative to total cost of production
3. Company's profit before depreciation, tax and interest on working capital.
4. Tax levied on profits and net sales before interest payments
5. Earning per share
6. Inter-regional display

• The main Navratna companies in India include RITES Limited, IRCON, Bharat Electronics Limited, Hindustan Aeronautics Limited, etc.

What are the criteria for granting Miniratna status to a company?

• Miniratna Category-1: To obtain Miniratna Company Category 1 status, it is necessary that the company has earned continuous profit for the last three years and has earned a net profit of at least Rs 30 crore once in three years.
• Miniratna Category-2: CPSEs which have earned continuous profit for the last three years and have positive net worth are eligible for Miniratna-II status.
• The Miniratna CPSE should not default in repayment of loan/interest payment on any loan to the Government.
• Miniratna CPSE companies will not be dependent on budgetary support or government guarantees.