Shares of Indian Renewable Energy Development Agency Ltd (IREDA) soared on Monday after the Department of Public Enterprises granted the company ‘navratna’ status late last week.

What Happened: IREDA, a public sector non-banking financial company, reported a 32% year-on-year increase in net profit at ₹337 crore for the January-March quarter, with profits holding steady compared to the previous quarter.

Asset quality also improved, with assets under management (AUM) growing by 26.8% year-on-year to ₹59,698 crore. This represents an 18% increase over the December quarter.

So far this year, IREDA’s shares have delivered a return of over 63%. The company made a strong stock market debut on November 29, 2023, with shares surging 87% from the issue price, marking it as one of the year’s most successful listings.

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IREDA, established in March 1987 and controlled by the Ministry of New and Renewable Energy (MNRE), supports electricity generation projects using new and renewable resources. The government holds a 75% stake in IREDA.

What does getting Navratna status mean for a PSU company?

The ‘navratna’ status allows top-tier public sector undertakings (PSUs) substantial financial autonomy, including making investments up to ₹1,000 crore without central government approval.

These firms can invest up to 30% of their net worth annually, as long as it remains under ₹1,000 crore, and can establish subsidiaries, form alliances, and enter into joint ventures abroad. To qualify, a company must already possess the ‘miniratna category I’ status and be listed under Schedule A of Central Public Sector Enterprises (CPSEs).

Share Price: IREDA shares were up 10.31% at ₹188.25 on Monday morning shortly after market open.

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