Moneycontrol Bureau
Rail Budget served cold at the Parliament by Union Minister Suresh Prabhu did not bring much cheer to rail-related stocks on Thursday. Passenger fares and freight rates were unchanged. In the Rail Budget, Prabhu proposed to set up a tariff regulator in a bid to keep fares dynamic. Also two new coach factories and three new type of high-speed trains were announced.
“The proposed rationalisation of freight tariffs will be critical to improving financial health, and enabling investments. Railways have become less competitive than road even for 1200 – 1500 km distances for container movements,” PWC India says.
So, here are stocks that were impacted by the Rail Budget 2016.
Shares rallied 10 percent intraday as Prabhu emphasised on improving security and vigilance in railways. Prabhu has said that all major stations will be brought under CCTV surveillance in a phased manner, to provide better security to our passengers especially women travellers. Currently, CCTV surveillance is provided at 311 stations.
It jumped over 5 percent intraday as the ministry has proposed for railway electrification by almost 50 percent and aims to electrify 2000 km. This year, the Railway Minsitry intends commissioning 1,600 kms, which is the highest ever. “In a business-as-usual approach, it may take us 10 to 15 years to complete the required electrification which we are targeting to complete in the next few years. We will accelerate the process and increase the pace multifold through innovative approaches of financing and project management including partnering with Ministry of Power. We will formulate a framework where the net savings from electrification will be able to finance the capital expenditure to minimise the strain on government exchequer,” Prabhu said in his speech.
Container Corp and Gateway Distriparks
Both the stocks surged 3-4 percent intraday as the minister proposed three dedicated freight corridors (DFC). Three DFC are North-South connecting Delhi to Chennai, East-Westconnecting Kharagpur to Mumbai & East Coast connecting Kharagpur to Vijayawada. The government will put three projects on high priority to ensure structuring, award and implementation in a time-bound manner through innovative financing mechanisms including PPP.
Titagarh Wagons, Texmaco Rail and Kalindee Rail slipped 8-9 percent at closing.
With Prime Minister’s emphasis on Make in India, Indian Railways finalised bids for setting up two loco factories with an order book of about Rs 40,000 crore. These factories will create an ecosystem of many flourishing small and medium ancillary units which will get connected to the global supply chain. They will boost employment potential of the entire Eastern region.
Prabhu said that the ministry has started bidding for manufacture, supply and maintenance of train sets to be used for Rajdhani and Shatabdi services.
Insurance companies were also in focus today the railways is working with insurance companies to offer optional travel insurance for rail journeys at the time of booking.Follow @NasrinStory
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