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Railway stocks rally after Govt notifies FDI liberalisation

Railway-related stocks are trading higher by up to 12% after the government notified the liberalised foreign direct investment (FDI) norms for rail infrastructure, allowing 100% FDI through automatic route in the sector.

Texmaco Rail & Engineering (up 12% at Rs 85), BEML (up 5% at Rs 568), Titagarh Wagons (up 5% at Rs 224), Kalindee Rail Nirman (5% at Rs 87.85), Kernex Microsystems (up 5% at Rs 51.45) and Stone India (up 4.5% at Rs 33.50) are up between 5-12% on the Bombay Stock Exchange (BSE). In comparison, the benchmark Sensex was up 0.20% at 26,616 at 0920 hours.

The government on Wednesday opened the railways for private and foreign investments in select areas – high-speed train, suburban corridors and dedicated freight lines. Foreign investment would also be allowed in construction and maintenance of these lines and rolling stock manufacturing facilities, electrification and signaling, the Business Standard report suggests.

However, FDI beyond 49% in sensitive areas will require Cabinet approval on a case-to-case basis. FDI was so far allowed only in mass rapid transit (MRT) systems of railways, added report.


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