Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,921.50-96.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

‘Rail’ stocks jump 5-12 per cent on FDI buzz

Shares of cos which depend on Railways for their income jumped 5-12% following news that govt is considering a proposal to allow FDI in railway.

, ET Bureau|
Updated: Mar 04, 2014, 04.01 AM IST
0Comments
Shares of companies which depend on the Indian Railways for their income jumped 5-12% on Monday following news that the government is considering a proposal to allow foreign direct investment in railway.
Shares of companies which depend on the Indian Railways for their income jumped 5-12% on Monday following news that the government is considering a proposal to allow foreign direct investment in railway.
Shares of companies which depend on the Indian Railways for their income jumped 5-12% on Monday following news that the government is considering a proposal to allow foreign direct investment in railway. Kernex Micro was leading the pack with gains of 12%, while Kalindee Rail jumped 10%. Stocks of other railway-related companies such as Texmaco Rail, Hind Rectifiers and Titagarh Wagon too edged up.

ET had reported on March 3 that the Department of Industrial Policy and Promotion (DIPP) will pitch in for FDI in railway before the dates for the general elections are announced. In fact, DIPP has put out a note to the Cabinet seeking approval to allow 100% FDI in railway infrastructure such as elevated rail corridor projects, freight terminals, suburban corridors, dedicated freight lines and highspeed train systems.

“Indian companies which manufacture equipment for Indian Railways will be immensely benefited if 100% FDI is allowed for railway infrastructure,” said LV Raju, MD for Kernex Microsystems.
‘Rail’ stocks jump 5-12 per cent on FDI buzz
“The biggest advantage for the Indian companies would be its saving on cost of funds, as we have been sourcing funds at 15-16% interest. After the implementation of FDI, cost of funds is likely to come down by 20-25%,” he added.

In fact, Kernex Micro had been in discussions with several global players for starting a venture. It has finalised talks with global players like Lalles for a 50:50 joint venture and will benefit a lot once FDI is allowed. Indian Railways needs nearly Rs5 lakh crore to bolster its level of infrastructure preparedness up to global standards, especially when it comes to issues of safety and speed. Given the current financial constraints, the Indian Railways depends heavily on foreign funds for expansion.

Also Read

US seeks more relaxation in India FDI policy

DPIIT kickstarts exercise to ease FDI norms more

India-bound FDI may face thorough frisking

Annual deadline for ecommerce's FDI compliance check: September 30

Govt asks e-commerce firms to file FDI compliance report annually

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service