RVNL, Ircon, other railway PSU stocks surge up to 8% on cabinet nod to Rs 24,657 crore projects

The Cabinet Committee on Economic Affairs last week green-lit eight new railway projects worth Rs 24,657 crore, covering 14 districts across seven Indian states. The projects are expected to be completed by the end of FY31.

Shares of Rail Vikas Nigam Ltd (RVNL), other railway PSUs surged around 8 percent on August 12 as the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi approved eight projects of Ministry of Railways with a total estimated cost of Rs 24,657 crore on Friday.

The projects, covering 14 districts, will be implemented in Odisha, Maharashtra, Andhra Pradesh, Jharkhand, Bihar, Telangana, and West Bengal with the construction of 64 new stations. These are slated to be completed by financial year 2030 - 2031.

The proposed projects will improve logistical efficiency by connecting the unconnected areas and enhancing transportation networks, resulting in streamlined supply chains and accelerated economic growth.

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Shares of Rail Vikas Nigam (RVNL) were leading the gains, rising around 8 percent to trade at Rs 561.50 on the National Stock Exchange (NSE) at around 12:20 pm. Peers like Ircon International, Railtel, and IRFC were also trading deep in the green at Rs 272.40, Rs 481.70 and Rs 185.19, respectively.

In the Union Budget of 2024-25, the Central government announced capital expenditure of Rs 2.62 lakh crore, an increase of Rs 2.40 lakh crore from the previous Budget.

Note that railway stocks have been on a downward trend recently as poor results dented the bull run in these counters. Shares of RVNL had corrected nearly 20 percent from their record high levels as of August 9 closing, while those of IRCON and IRFC had corrected 15 percent and 22 percent respectively from their peaks, which were hit in mid-July.

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