![As a Navratna company, Mazagon Dock has permission to invest up to Rs 1,000 crore without central government approval. As a Navratna company, Mazagon Dock has permission to invest up to Rs 1,000 crore without central government approval.](https://images.news18.com/ibnlive/uploads/2021/07/1627283897_news18_logo-1200x800.jpg?impolicy=website&width=510&height=383)
As a Navratna company, Mazagon Dock has permission to invest up to Rs 1,000 crore without central government approval.
Mazagon Dock Shipbuilders has now joined the ranks of other Navratna Indian companies like NMDC, RVNL, IRCON and IREDA.
Shares of Mazagon Dock Shipbuilders soared as much as 7.36 per cent to Rs 4269.75 per share in morning trade on Wednesday as the company announced that it has been granted 'Navratna' status.
“This is to inform you that the Department of Public Enterprises (DPE) has approved the proposal to grant Navratna status to Mazagon Dock Shipbuilders Limited through letter dated June 25, 2024,” the company informed the stock exchanges.
With its latest financial performance, the company has now joined the ranks of other Navratna India companies such as NMDC, RVNL, IRCON and IREDA.
Mazagaon Dock- What happens after Navratna status?
Navratna status gives Mazagon Dock permission to invest up to Rs 1,000 crore without central government approval. You can also invest up to 30% of your net worth annually, as long as it does not exceed Rs 1,000 crore.
Navratna companies also have the flexibility to form joint ventures, enter into alliances and establish subsidiaries abroad.
To qualify as a Navratna company, a PSU must first obtain Miniratna status. They must then maintain an annual net profit of Rs 5 billion for three consecutive years, with an average annual turnover exceeding Rs 25 billion during the same period or an average annual net worth exceeding Rs 15 billion. For FY24, Mazagon Dock reported annual revenue of Rs 9,466 crore.
Meanwhile, news that negotiations were underway to acquire additional Kalvari-class (Scorpene) submarines for the Navy had sent the stock up more than 4% in the previous session as well. The expected Rs 35,000-crore deal aims to significantly strengthen India's submarine fleet.
The three new submarines under discussion will be larger and incorporate advanced electronics, giving them greater operational capabilities and endurance than previous models, according to sources reported by ET.
Given that Mazagon Dock Shipbuilders is a government-owned PSU operating under the Ministry of Defense, it acts as the designated shipyard responsible for building naval vessels and submarines for the Indian Navy. Therefore, the Rs 35,000-crore deal to expand the Indian Navy's submarine fleet directly benefits Mazagon Dock.
State-owned shipbuilder Mazagon Dock Shipbuilders. reported significant financial growth in the March quarter compared to the previous year.
The company's revenue rose 50 per cent to Rs 3,103.6 crore from Rs 2,078.6 crore in the same period last year. Net profit more than doubled to Rs 663 crore from Rs 326 crore a year ago.