Shares of Rail Vikas Nigam Ltd (RVNL) closed 1.37 per cent lower at Rs 103.17 on Thursday. This put an end to the five-day rally of the railway stock where it went from its closing price of Rs 74.4 last Wednesday to an intraday high of Rs 114.62 on Wednesday at the BSE.
Just a day ago, the Union Ministry of Finance declared RVNL as the latest central public sector enterprise (CPSE) to achieve the ‘Navratna’ status. Including RVNL, there are currently 13 Navratna CPSEs in India.
What Are Navratnas?
Navratna enterprises are public companies that have the financial autonomy to invest up to Rs 1,000 crore without the need for explicit approval from the Centre. The Navratna status was brought about in 1997 when it was awarded to nine CPSEs, who were considered to be the metaphorical ‘nine gems’ among Indian PSEs.
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Within the Rs 1,000 crore limit, Navratna companies can invest up to 15 per cent of their net worth on a project or up to 30 per cent of their net worth in a given year.
Presently, the 13 Navratnas in India are: Shipping Corporation of India (SCI), Rashtriya Ispat Nigam Limited (RINL), Hindustan Aeronautics Limited (HAL), Mahanagar Telephone Nigam Limited (MTNL), Container Corporation of India (CONCOR), Engineers India Limited (EIL), NMDC Limited, Bharat Electronics Limited (BHEL), National Buildings Construction Corporation (NBCC), Oil India Limited (OIL), National Aluminium Company (NALCO), NLC India Limited (NLCIL) and RVNL.
RVNL Rally
Earlier, the RVNL bagged two separate orders from Gujarat Metro Rail Corporation (GMRC) as part of a consortium it formed with Siemens.
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Other than the GMRC orders, there is positive sentiment among railway stocks as the Indian Railways remain poised to commence production of advanced Vande Bharat trains later this year. RVNL has received orders for production on 120 Vande Bharat express trains.
In the past one-year period, RVNL has gained almost 200 per cent on the bourses.
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