Shares of Railway-related stocks such as Rail Vikas Nigam (RVNL), IRFC (Indian Railway Finance Corp), IRCON, IRCTC, RailTel, RITES, Texmaco Rail, Titagarh Railsystems, and others witnessed sharp correction after Finance Minister Nirmala Sitharaman presented her interim Budget speech in the Lok Sabha on Thursday.
The sell-off in the railway space was triggered after FM Sitharaman earmarked a capex of ₹2.55 lakh crore for the Indian Railways, which is marginally higher than the ₹2.4 lakh crore proposed in the Budget 2023, but lower than industry expectations of ₹3 lakh crore. Brokerage firm Nirmal Bang was expecting a 20% rise in Railway Capex during this budget.
RITES, the engineering services company under ministry of railways, was the top laggard with a 5.2% fall. While shares of IRCTC, the catering and ticketing arm of the Indian Railways, fell as much as 1.95%, RVNL stock price tumbled 4.4% post Budget announcement.
Among others, IRFC, IRCON, RailTel, Texmaco Rail, and Titagarh Railsystems shares tanked in the range of 1-4%.
In comparison, the BSE Sensex tumbled as much as 167 points to hit a low of 71,585, and the NSE Nifty fell by 67 points to 21,659 levels as FM didn’t make any big announcements in her budget speech.
In her budget speech, FM announced that three major economic railway corridor programmes will be implemented in the country under PM Gati Shakti-to improve logistics efficiency and reduce cost. These are energy, mineral and cement corridors, port connectivity corridors, and high-traffic density corridors.
"The projects have been identified under the PM Gati Shakti for enabling multi-modal connectivity. They will improve logistics efficiency and reduce cost," the FM says in Parliament.
The FM further says that the resultant decongestion of the "high-traffic corridors" will also help in improving the operations of passenger trains, resulting in safety and higher travel speed for passengers. "Together with dedicated freight corridors, these three economic corridor programmes will accelerate our GDP growth and reduce logistic costs."
Additionally, the FM announced that 40,000 normal rail bogies will be converted to the "Vande Bharat'' standards to enhance the safety, convenience and comfort of passengers. However, she didn’t disclose how many new Vande Bharat trains as well as no-frills Amrit Bharat Express will be introduced this year. Last year, 35 indigenously designed, semi-high speed Vande Bharat Express trains (70 services) were rolled out, while six more trains are set to be launched soon, making it to 82 services.
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