Shares of Railway stocks like Rail Vikas Nigam Ltd., IRCON International and BHEL declined on Tuesday after reports suggested that the Indian Railways may be forced to reissue tenders for 120 Vande Bharat Sleeper trains, as the talks of a joint venture between RVNL and Russia's TMH consortium broke down, according to reports. The RVNL-TMH consortium had won the said bid.

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A consortium of Russia’s CJSC Transmashholding (TMH) and Rail Vikas Nigam Ltd (RVNL) had won the bid for the manufacture of 120 trainsets (locomotive and carriages coupled together), valued at around Rs 36,000 crore. The consortium is yet to sign a contract with the Ministry of Railways.

Reports attributing to railway officials stated that talks between RVNL and TMH have broken down over the issue of the majority shareholding in the proposed joint venture and demand for safety clauses by the Russian company.

TMH has not deposited the bank guarantee of nearly Rs 200 crore required for the project to get started, according to reports.

The Indian Railways had invited bids for Vande Bharat tender in December 2022 and the offers were opened in March. Consortiums of BEML-Titagarh, BEML-Siemens, and Medha Srvo Drives-Stadler Rail and Alstom Transport were among the bidders.

Shares of Rail Vikas Nigam fell as much as 4 percent after the reports surfaced. Shares of other stocks like BEML, IRCON International, RITES and BHEL are also down between 1-3 percent on Tuesday.

On the other hand, shares of Titagarh Wagons jumped as much as 7 percent to another 52-week high of Rs 499.70, before cooling off.

Titagarh Wagons' Vice Chairman and Managing Director Umesh Chowdhary said that despite the potential reissuing of the tender, the company's existing contract with the government, that of manufacturing 80 such trains remains unaffected. "Our contract for 80 trains is signed with the government, and it doesn't change," he said.

In a display of confidence and commitment to the project, Chowdhary added, "If the 120 trains order comes for re-bidding, we will bid again."