Government Confers Navratna Status on IRCTC and IRFC

On Monday, March 3, the Department of Public Enterprises announced the approval for upgrading Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) to 'Navratna' Central Public Sector Enterprises (CPSEs), elevating them from their previous 'Miniratna' status.

With this recognition, IRCTC and IRFC become the 25th and 26th companies to achieve Navratna status among CPSEs. IRCTC, which operates under the Ministry of Railways, reported an annual revenue of ₹4,270.17 crore, a profit after tax of ₹1,111.26 crore, and a net worth of ₹3,229.97 crore for the financial year 2023-24, as per the Department of Public Enterprises.

Similarly, IRFC, another Ministry of Railways CPSE, recorded a turnover of ₹26,644 crore, a profit after tax of ₹6,412 crore, and a net worth of ₹49,178 crore for FY24.

At 3:05 pm on Monday, March 3, IRCTC share price were trading at ₹676.65, reflecting a 0.85% increase, while IRFC shares were down by 1.09%, priced at ₹111.23 apiece.

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What Does 'Navratna' CPSE Mean?

Public sector enterprises (CPSEs) in India are categorized into three main groups—Miniratna, Navratna, and Maharatna—based on their financial performance and operational autonomy. The purpose of this classification is to grant greater decision-making authority and investment freedom to these state-owned companies, allowing them to undertake projects independently within a specified financial limit.

To qualify as a Navratna, a CPSE must first hold Miniratna-I status, which requires three consecutive years of profitability, a pre-tax profit of at least ₹30 crore in at least one of those years, and a positive net worth.

In addition to this, companies aspiring for Navratna status must have earned an "Excellent" or "Very Good" rating in their MoU evaluation for at least three of the last five years and must achieve a composite score of 60 or more across six key performance indicators. These include net profit to net worth, manpower cost as a percentage of total production cost, PBDIT to capital employed, PBIT to turnover, earnings per share, and inter-sectoral performance.

Some of the well-known CPSEs that already hold Navratna status include Bharat Electronics, NBCC, and Engineers India.