Shares of Ramkrishna Forgings Ltd. (RKFL) and Titagarh Rail Systems Ltd. (TRSL) gained on Friday after their consortium won yet another order from the Indian Railways. The 20-year order was worth Rs 12,226.5 crore, and was awarded under the Aatmanirbhar Bharat initiative.

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Under the contract, the consortium will manufacture and supply 15,40,000 forged wheels over a span of 20 years. As per the contract, the consortium will be delivering 40,000 forged wheels during the first year, 60,000 wheels in the second year and 80,000 wheels every subsequent year thereafter.

The wheels manufactured under this agreement will cater to the requirements of multiple platforms, such as the LHB coaches, WAG9 Locomotives, Vande Bharat Express Trains, etc.

The RKFL-TRSL consortium will be establishing a state-of-the-art manufacturing facility to manufacture these forged wheels, with total annual production targeted at 2,00,000 wheels when fully operational.

Not only will this facility address the demands of the domestic railway sector, but also help the consortium address the latent demand from the private sector as well as export markets.

The successful execution of this project will require a capital expenditure ranging from Rs 1,000 to1,200 crores. To meet this financial requirement, both companies will contribute equity on an equal basis, ensuring a robust funding structure to support the project's capital expenditure needs.

Shares of Ramkrishna Forgings are trading off the day's high but with gains of 2.5 percent at Rs 418.05, while those of Titagarh Rail are also up by a similar quantum at Rs 426.70.

First Published:Jun 15, 2023 9:18 PM IST