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IRCON and RVNL: What can a merger achieve for the stakeholders?

As a merged entity, IRCON and RVNL can possess a solid portfolio of services, which can help them bring down cost and build capabilities that can shield them against competition

October 08, 2021 / 10:38 AM IST
IRCON and RVNL: What can a merger achieve for the stakeholders?

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

As the saying goes, one plus one could be eleven and not two. A merger of railway engineering companies, as suggested by principal economic adviser Sanjeev Sanyal, could be a valuable idea from a shareholder’s perspective. First and foremost, capital allocation will improve drastically and that could justify returns and valuations they command. For instance, in the case of Rail Vikas Nigam Limited (RVNL) and IRCON International (IRCON), which are the most likely merger candidates considering the overlap of businesses,...

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