Texmaco Rail and Engineering Ltd has said it will not proceed with the proposed rights issue amid a slowdown in the economy, and its promoters will infuse equity capital up to Rs 200 crore to meet fund requirement of the company. Last year, the board had approved the rights issue to ensure adequate resource availability for the firm.

”…regard to the urgency of the fund requirements of the company, the board has approved the issuance of equity shares of the company by way of the preferential issue to the promoters for an amount not exceeding Rs 200 crore,” a company statement said. After reviewing its earlier decision, the board has decided not to proceed with the rights offer amid an overall slowdown in the economy and decline in stock price.

The company posted Rs 27 crore loss in the first quarter of the current fiscal due to the disruptions caused by the COVID-19 crisis. ”The overall impact of COVID-19 on the country is still severe… the silver lining is the privatisation of railway services to boost rail infrastructure. This would lead to the generation of new opportunities,” the company said on Tuesday.

The consolidated order book of the company is at Rs 4,200 crore, it said.