Railway related stocks rally as Cabinet approves 100% FDI proposal

NEW DELHI: Railway related stocks such as Texmaco, Kalindee Rail, Titagarh Wagons, Astra Microwave Products, Bharat Electronics rallied up to 16 per cent in trade on Thursday, after the Union Cabinet allowed foreign investment in the Railways for the first time.

According to experts it is the step in right direction which is intended to raise funds for expansion of the railways and encourage domestic manufacture of arms.

Reacting to the news, Texmaco Rail & Engineering rose as much as 16 per cent, followed by Kalindee Rail, Titagarh Wagons, Kernex Microsystems, Hind Rectifier, MIC Electronics and Stone India which were locked in upper circuit at 5 per cent. "100 per cent foreign investment in railway infrastructure projects will be allowed while in the case of defence the limit has been raised to 49 per cent from the current 26 per cent, subject to the Indian owners exercising management control," ET reported.

In case of Railways, 100 per cent FDI will now be allowed in railway infrastructure segments such as electrification, signalling, high speed and suburban corridors, added the report.

100 per cent FDI will also be allowed through the Special Purpose Vehicle route to provide last mile connectivity to ports and mines. Further, some railway operations have also been partially opened up to foreign investment.