‘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 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.
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.