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Merger pushes Texmaco stock, Kalindee tanks

Friday, 23 May 2014 - 7:10am IST | Place: Kolkata | Agency: dna

In a move aimed at providing single stop solution to the railways, Texmaco Rail & Engineering decided to merge itself with Kalindee Rail Nirman (Engineers) Ltd, helping the stock soar 9% to Rs 108 a share on the Bombay Stock Exchange.

Despite the upbeat mood in the broader market, Kalindee stock, however, tumbled and was locked at 10% lower circuit to end at Rs 122 on BSE. Market players attributed the sharp fall in the stock to the share-swap ratio that was mostly skewed in favour of Texmaco Rail. Both the boards approved that 106 shares of Texmaco will be issued to the holder of every 100 shares of Kalindee.

Kalindee Rail Nirman, earlier acquired by Saroj Poddar-owned Texmaco, provides signaling, telecommunications, track and information systems to the Railways, and the merger will supplement Texmaco's wagon making expertise and the combined entity would help provide single stop solution for Railways and other clients.

Meanwhile, Texmaco is set to win a large defence order by emerging as the lowest price bidder in a tender to develop and supply special purpose wagons for carrying defence equipment.

"We are hopeful of winning the contract as we have emerged as the L1 (lowest bidder) in the large value defence tender expected to be finalised shortly," Sandeep Fuller, chief executive officer (heavy engineering) of Texmaco Rail said.

Fuller, however, refused to disclose the likely tender value citing sensitivity nature of the information.

The Saroj-Poddar group-owned wagon maker has also made a breakthrough in designing and building double stack wagons for carrying automobiles.

"So far, cars and other vehicles were being transported from the factories to the dealers via road. Transporting them via rail would significantly cut down carrying time and costs. We also see significant export opportunities for these types of wagons in neighbouring geographies," Fuller said.

Texmaco's competitor Titagarh Wagons also claims to have already developed such wagons and has supplied them on pilot basis to automobile makers like Maruti Suzuki.

Texmaco has diversified into manufacturing of Electric Multiple Units or the city passenger trains with the setting up of a facility at its existing Sodepur plant near Kolkata.

"The first rake of 9 coaches is scheduled to be dispatched in the second quarter of the current year," the company said in a release.

Its joint venture with UGL Rail is currently executing an order for supply of 135 bogie frames to Australia while it has secured order from Indian Railways for development and supply of bogie frames to Kapurthala coach factory.

Texmaco has suffered a loss of Rs 3.5 crore during the January-March quarter against a profit of Rs 8.85 crore even as revenue dropped 54% to Rs Rs 91.72 crore mainly due to lack of orders and late issue of wagon orders by the Railways as reported by dna earlier.

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