Shares of Mazagon Dock Shipbuilders soared up to 7.36 per cent, hitting its 52-week high of Rs 4269.75 per share on the BSE Wednesday’s early morning deals as the company announced that it has been granted ‘Navratna’ status.
“This is to inform that Department of Public Enterprises (DPE) vide its letter dated 25″ June 2024 has approved the proposal for grant of Navratna status to Mazagon Dock Shipbuilders Limited,” the company informed the stock exchanges.
With its recent financial performance, the company has now joined the ranks of other Navratna Indian companies such as NMDC, RVNL, IRCON and IREDA among others.
Mazagaon Dock- What Happens After the Navratna Status?
With the Navratna status, Mazagon Dock gets the authority to invest up to Rs 1,000 crore without requiring approval from the central government. Additionally, it can invest up to 30 percent of its net worth annually, provided it does not exceed Rs 1,000 crore.
Navratna companies also have the flexibility to form joint ventures, establish alliances, and set up subsidiaries abroad.
To qualify as a Navratna company, a PSU must first achieve Miniratna status. It must then maintain a net profit of Rs 5,000 crore annually for three consecutive years, along with either an average annual turnover exceeding Rs 25,000 crore or an average annual net worth surpassing Rs 15,000 crore over the same period. For FY24, Mazagon Dock reported an annual turnover of Rs 9,466 crore.
Meanwhile, the stock surged over 4 percent in the previous session as well, driven by news of progressing talks to acquire more Kalvari-class (Scorpene) submarines for the Navy. The anticipated Rs 35,000-crore deal aims to bolster India’s submarine fleet significantly.
Sources reported by ET revealed that the three new submarines in discussion will be larger and incorporate advanced electronics, enhancing their operational capabilities and endurance compared to previous models.
Given that Mazagon Dock Shipbuilders is a government-owned PSU operating under the Ministry of Defence, it serves as the designated shipyard responsible for constructing naval vessels and submarines for the Indian Navy. Hence, the Rs 35,000-crore deal to expand the Indian Navy’s submarine fleet stand to directly benefit Mazagon Dock.
Mazagon Dock Shipbuilders., the state-run ship manufacturer, reported significant financial growth for the March quarter compared to the previous year.
The company’s revenue surged by 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, up from Rs 326 crore a year ago.
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