Expect sops for wagon industry in Rail Budget: Texmaco

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Texmaco BSE | NSE 10/02/12 Are Mutual Funds betting on Texmaco?

Ramesh Maheshwari, President, Texmaco , expects sops for wagon industry in the Rail Budget. He said freight loading grew at a very impressive rate of 9%. "Railways need at least 1 lakh wagons over the next five years," he added.

Here is a verbatim transcript of the exclusive interview with Ramesh Maheshwari on CNBC-TV18. Also watch the accompanying video.

Q: What are you expecting from Mamata Banerjee tomorrow?

A: We are expecting a whole lot indeed. Today is a very special day when she is not only presenting a budget, she has swept the municipal polls in West Bengal and she must be in a very high state of excitement and maybe she would be extra gracious to the wagon industry too, in the state of West Bengal especially bearing in mind that 85-90% of the entire industry is just concentrated in West Bengal.

I must say that the Railway turnaround story is well known. There is a whole lot of expectations as in previous years, so this year and it will continue to be so for many years to come. Freight loading has grown at a very impressive rate of 9%. Therefore wagon industry reasonably looks forward to a very sizeable spurt in the procurement of wagons. But in this connection I would like to say that what is required is not merely good numbers every year. There must be a long-term policy for which the industry has been emphasizing and what can happen is that they need it, they have planned it, they know their total requirement over a period of next five years. I would safely say arising from my discussions at various levels on the Railway Board that they would need a minimum 100,000 wagons (hundred thousand) over the next 5 years.

Now let this be planned, so that the industry has enough time to plan the inputs, there can be stability of operation. We should not be just kept guessing as to what should be the numbers to be procured and there can always be a little review at the end of each year. So 75% of the total requirement can be fixed and the balance can vary which gives flexibility to Railways and their procurement programme and also to the industry to plan their production and meet their deliveries on time.

Q: Just to digress from the Railway Budget - you has earlier approved raising funds of close to Rs 200 crore via either Qualified Institutional Placement (QIP) or Foreign Currency Convertible Bond (FCCB), have you decided what mode you would like to use?

A: Most probably it could be QIP, but this certainly rests with the Board of Directors. There are various options and there is an enabling resolution passed by the Board of Directors and it is up to them to finally decide after taking pros and cons of the various routes.

Also Read: Have orders for more than 6,000 wagons: Texmaco