Shares of Mazagon Dock Shipbuilders soared 7.5 percent in trade to hit a fresh record high of Rs 4,271.20 on June 26 after the company became the latest to join the list of companies to be granted the 'Navratna' status by the Department of Public Enterprises. With this, the company became the 18th public sector undertaking (PSU) to be awarded the status.

With this award, the company joined the likes of Engineers India, CONCOR, Bharat Electronics, Hindustan Aeronautics, RCF, NALCO, NMDC, RVNL, IRCON and IREDA, all of which hold 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.

Aside from this, the stock has also been on a roll in recent months, buoyed by the government's push on indigenisation, rising capex for the sector and growing export opportunities. Flying high on these growth levers, the stock has already delivered more than two-fold returns in the past three months.