RVNL, IRFC, other railway stocks fall up to 8% as Budget announces unchanged capex for FY26

Shares of railway companies, including IRCTC, RVNL and IRFC among others tumbled after the Union Budget for FY26 maintained capital expenditure (capex) for Indian Railways at Rs 2.52 lakh crore.

Shares of railway companies, including IRCTC, RVNL and IRFC among others tumbled up to 8 percent on Monday after the Union Budget for FY26 maintained capital expenditure (capex) for Indian Railways at Rs 2.52 lakh crore, unchanged from the previous fiscal.

The absence of fresh investments or a reform push triggered a broad-based sell-off in railway stocks. Shares of Indian Railway Catering and Tourism Corporation (IRCTC) declined as much as 3.95 percent to an intraday low of Rs 763.3 on the NSE. The stock has lost 6.12 percent over the last two sessions.

Indian Railway Finance Corporation (IRFC) fell 5.5 percent to Rs 133.45, after opening with a 2.75 percent loss. The stock has slipped 10.23 percent in the past two sessions.

Rail Vikas Nigam Ltd (RVNL) and Ircon International also witnessed heavy selling, dropping 7.31 percent and 5.74 percent, respectively. Shares of Titagarh Rail Systems fell 7.72 percent to Rs 882.2, while Jupiter Wagons slipped 7.85 percent during intraday trade.

The unchanged capex allocation comes at a time when the Railways requires substantial funds for infrastructure expansion, including track laying, gauge conversion, electrification, signalling, and rolling stock upgrades.

The ministry’s internal and extra-budgetary resources (IEBR) have also remained static at Rs 13,000 crore for FY26, the same as FY25 and significantly lower than Rs 52,783 crore in FY24. IEBR includes funds raised through sources like IRFC for capital investments.

Railway Budget 2025: Capex remains unchanged at Rs 2.52 lakh crore for second year in row

While the Railways maintained that the Budget prioritises operational safety, experts believe the allocations are inadequate.

"The Gross Budget Outlay for Signalling and Telecom works for FY26 stands at Rs 6,800 crore. Considering Indian Railways' plan to roll out ‘Kavach’ safety technology on 44,000 route km over the next five years, the funds appear insufficient to meet this target," Shailendra Kumar Goel, former Director General of the Indian Railways Institute of Signal Engineering and Telecommunications told PTI.

He added that critical passenger safety initiatives should be prioritised to restore public confidence after recent rail accidents.

The railway sector, which had been a market favourite in the past year, is witnessing heightened volatility post the Budget announcement as investors reassessed growth prospects in the segment.

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