Shares of Titagarh Wagons and Ramkrishna Forgings rallied up to 8% in early trade on Friday after their consortium won an order worth ₹12,226.5 crore from the Indian Railways. The order is for the manufacturing and supply of 15,40,000 forged wheels of different rolling stocks to the Railways over a period of 20 years.
Following the announcement, shares of Titagarh Wagons opened 2.9% higher at ₹428.20 against the previous closing price of ₹416.20 on the BSE. In the first hour of trade so far, the railway stock rose as much as 3.3% to ₹430, while the market capitalisation climbed to ₹5,095 crore.
In a similar trend, Ramkrishna Forgings share price gained as much as 7.7% to ₹440 in the early trade so far. The stock opened at ₹433.10 against the previous closing price of ₹408.50, driven by strong volume trade. On the volume front, 0.85 lakh shares changed hands over the counter as compared to two-week average volume of 0.51 lakh stocks, while the market capitalisation increased to ₹6,771 crore.
Both the companies in a joint statement said today that the consortium between Ramkrishna Forgings Limited (RKFL) and Titagarh Rail Systems Limited (TRSL), has been awarded the contract to manufacture and supply 15,40,000 forged wheels over a span of 20 years, under the Atmanirbhar Bharat Initiative by Ministry of Railways, Government of India.
“The contract will see the consortium delivering 40,000 forged wheels during the first year, 60,000 wheels in the second year and 80,000 wheels every subsequent year thereafter, with the total contract valued at ₹12,226.5 crore,” as per the exchange filing.
As per the release, the wheels manufactured under this agreement will cater to the requirements of multiple platforms, such as the LHB coaches, WAG9 Locomotives, Vande Bharat Express Trains, etc.
The RKFL-TRSL consortium will be establishing a manufacturing facility to manufacture these forged wheels, with total annual production targeted at 2,00,000 wheels when fully operational. “Not only will this facility address the demands of the domestic railway sector, but also help the consortium address the latent demand from the private sector as well as export markets,” it said.
The successful execution of this project will require a capital expenditure ranging from ₹1,000 to ₹1,200 crore. To meet this financial requirement, both companies will contribute equity on an equal basis, ensuring a robust funding structure to support the project's capital expenditure needs.
Commenting on this momentous occasion for Ramkrishna Forgings Limited (RKFL), Naresh Jalan, Managing Director, RKFL, said, “We are honored to have been selected by the Ministry of Railways for this extraordinary undertaking. This project stands as a testament to our unwavering dedication to promoting indigenous manufacturing and fostering self-reliance.”
Speaking on the development, Umesh Chowdhary, Vice Chairman & Managing Director, TRSL said, “We are delighted to have been awarded this landmark contract and are gunning to commence production at the earliest. As a partner in the winning consortium, we at TRSL are wholly committed to realizing the Prime Minister’s vision of an Aatmanirbhar Bharat and will be resolute in our efforts to indigenise production of forged wheels in our country. With this contract, the Titagarh group is staying true to its motto of providing quality mobility solutions and strives to cement its status as a world-class service provider for the infrastructure sector.”
Earlier in March this year, Titagarh Wagons and Ramkrishna Forgings formed a special purpose vehicle (SPV) for the manufacturing of train wheels.
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