These PSU stocks rise up to 5% after government accords Navratna status

Shares of listed public sector undertakings (PSUs) that were accorded the ‘Navratna’ status on Friday jumped up to 5% in trade on Monday, September 2.

Reacting to the announcements, shares of SJVN gained as much as 5% on Monday to hit an intra-day high of ₹140 apiece on the National Stock Exchange of India (NSE).

RailTel Corp also climbed as much as 5.1% to hit the day’s high of ₹516, while NHPC climbed 4.6% to ₹100.5 apiece on the NSE.

Shares of these three PSUs have proven to be multibagger stocks in the past one year. While the NHPC stock has surged 91% in the past 12 months, SJVN and RailTel have delivered 110% and 117% returns, respectively, during this period.

The new ‘Navratna’ status will further boost investor sentiment as the board of these state-owned companies would now enjoy greater autonomy in terms of taking financial decisions.

For instance, Navratna companies can invest up to ₹1,000 crore or 15% of their net worth in a single project without government approval. They can also form joint ventures and alliances, or establish subsidiaries overseas.

After Friday’s upgrade, the number of ‘Navratna’ PSUs in India has increased to 25 from 21 earlier. The list includes names like Hindustan Aeronautics, Bharat Electronics, NBCC (India) Ltd, Shipping Corporation of India, Rail Vikas Nigam, ONGC Videsh, IRCON International, Indian Renewable Energy Development Agency (IREDA), among others.

Shares of NHPC Ltd were trading 1.8% higher at ₹97.85 apiece on the NSE at 11:08 am. RailTel Corp shares were up 2.04% at 500.8 apiece on the NSE, while SJVN shares were trading 2.19% higher at ₹136.27 apiece.