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Mahesh

04/05/23 06:43 AM IST

Rail Vikas Nigam Limited (RVNL) granted Navratna Status

In News
  • Rail Vikas Nigam Limited (RVNL), a Central Public Sector Enterprises of Ministry of Railways, has been granted Navratna Status.
Navratna Status
  • Navaratna Companies (Navaratnas) is a category of Central Public Sector Enterprise (CPSE) which meets certain operational and financial eligibility based on net profit, the total cost of production, earnings per share and inter-sectoral performance.
  • Navratnas are a set of public sector companies that possess financial autonomy to invest up to 1000 crores without any approval from the central government. Navratna status was first allotted to 9 public sector enterprises in 1997.
Significance of the status
  • Financial Independence: Up to Rs. 1,000 crore, or 15% of their net worth, on a single project, or 30% of their net worth for the entire year (not exceeding Rs. 1,000 crores).
  • It will enhance operational and financial autonomy, thus increasing the power to make financial decisions.
  • It will enable the PSUs to make equity investments and undertake various financial joint ventures (JV) and wholly-owned subsidiaries
  • This development will lead to mergers and acquisitions (M&A) in India as well as abroad.
  • The company boards could implement and modify schemes pertaining to personnel as well as human resource management and training.
  • Companies could float fresh equity, transfer assets, divest shareholding in subsidiaries, however, would be subjected to the condition that the delegation will only be in respect of subsidiaries set up by the holding company.
About RVNL
  • RVNL was incorporated as PSU on 24th January, 2003, with the twin objectives of implementation of projects relating to creation and augmentation of capacities of rail infrastructure on fast track basis and raising of extra budgetary resources for SPV projects.
  • The company began its operation in 2005 with the appointment of Board of Directors.
  • The company was granted Mini-Ratna status in September 2013.
  • The authorized share capital of the company is Rs. 3000 Crore, with paid up share capital of Rs. 2085 crore.
Source- PIB

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