Rail Vikas Nigam Ltd (RVNL) has reached an agreement with the Russian partner for Vande Bharat train orders. Arm Kinet Railway Solutions and Russian entities have finalised the partnership terms.

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Rajesh Prasad, Director-Operations at RVNL in an interaction with CNBC-TV18 said the order for multiple Vande Bharat trains, pertains to modernising its coaches. The joint venture includes RVNL with 25 percent share, Metrowagonmash with 70 percent share and Locomotive Electronic Systems with 5 percent share.

Earlier news reports indicated RVNL asked for higher share of 69 percent in joint venture post winning the bid. However, Prasad while interacting with CNBC-TV18 on July 31 said "we have signed the shareholding agreement as per the Memorandum of Understanding, which is in interest of the project, government and country". Hence, RVNL's share maintains at 25 percent.

This order for 120 train sets is for Rs 120 crore each and is to be manufactured at Lathur. The first delivery is to be made two years hence and the second delivery will be two months post the first delivery. Its maintenance component will be at 4 percent per annum, which will be spread over 35 years. The total cost of project is about Rs 36,000 crore, of which RVNL's share will be Rs 8,700 crore.

The government held 78.2 percent stake in RVNL at the end of June 2023 quarter and hence, to comply with SEBI laws on minimum public shareholding, the government used the Offer For Sale (OFS) route to reduce its stake by 5.36 percent in the company. Hence, the government's stake is now at 72.84 percent. There was a strong response received for this OFS from institutional investors.

RVNL's orderbook jumps to Rs 65,000 crore and the company targets Rs 75,000 to Rs 1,00,000 crore of orderbook.

The shares of RVNL are trading 2.4 percent higher at Rs 123 on July 31 noon.

(Edited by : Vahishta Unwalla)