IREDA Gets Navratna Status

Context

Recently, Indian Renewable Energy Development Agency (IREDA) was granted ‘Navratna’ status by the Department of Public Enterprises. 

• Comparing year-on-year figures, IREDA witnessed a 32% rise in net profit, while it remained consistent quarter-on-quarter at ₹337 crore.

About Navratna Status

• Criteria for Classification: 
  • To qualify for Navratna status, a company must first attain the Miniratna category-I designation and be included in Schedule A of Central Public Sector Enterprises (CPSEs).
  • For a company to achieve Navratna status, it must report a net profit of more than Rs 5,000 crore for three consecutive years, and maintain an average annual turnover of Rs 25,000 crore for three years, or have an annual average net worth of over Rs 15,000 crore for three years.
  • CPSEs must have achieved an ‘excellent’ or ‘very good’ rating in the Memorandum of Understanding (MOU) for three out of the last five years.
  • Also, eligible CPSEs must attain a composite score of 60 or above in six selected performance indicators (see image).
• Benefits Avail: 
  • The Indian government granted Navratna status to premier public sector undertakings (PSUs), empowering them to execute significant investments of up to ₹1,000 crore without requiring approval from the central authority.
  • These firms are permitted to allocate up to 30% of their net worth annually, provided it remains under ₹1,000 crore. 
  • They have the option to participate in joint ventures, forge partnerships, and set up overseas subsidiaries.
    • The status gives the Board of Directors of these CPSEs the power to allow mergers and acquisitions in India and abroad.
      • However, they need approval from the Cabinet Committee on Economic Affairs (CCEA) to make investments abroad.

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About IREDA: Indian Renewable Energy Development Agency

• Under the Aegis of: IREDA is a non-banking financial institution under the Ministry of New and Renewable Energy,  established in 1987.
• Evolution:
  • 1987: It was established and later to be classified under the “Public Financial Institution” under section 4 ‘A’ of the Companies Act, 1956, and is officially registered as a Non-Banking Financial Company (NBFC) with the Reserve Bank of India (RBI).
  • 2015: The Ministry of New and Renewable Energy (MNRE) acknowledged IREDA’s contributions by conferring upon it the status of Mini Ratna (Category-I).
  • 2023: The MNRE, has upgraded IREDA from Schedule B to Schedule A category Central Public Sector Enterprises. This paved the way for IREDA to attain Navratna status, granting it greater financial autonomy.
  • 2024: The Department of Public Enterprises granted ‘Navratna’ status to IREDA.
• Mandate: IREDA is engaged in promoting, developing and extending financial assistance for setting up projects related to new and renewable sources of energy.
  • It offers financial assistance to projects that produce electricity using fresh and sustainable sources. The government holds a 75% ownership stake in the company.
• Some Remarkable Projects of IREDA:
  • Green Rooftops Scheme, World’s First Floating Solar PV Project, Financing Battery Energy Storage Systems (BESS)

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