The ministry of railways owns a majority stake in both Rail Vikas Nigam (72.8 per cent), Ircon International (65.17 per cent), and the two companies have a combined market capitalisation of around ₹65,000 crore. After reports earlier this month said that the merger was on the table, the two companies had informed stock exchanges that they had not been informed of any such proposal so far by the government.
However, the official, on condition of anonymity, said that the railways is likely to go forward with the plan, and in view of that, has chosen to defer the selection of a new chairman and managing director for Ircon.
Earlier, the ministry had reportedly asked the Public Enterprises Selection Board to defer the selection process for the post due to the impending merger. The two companies operate in the railway infrastructure space.
Parallelly, the government also has plans of divesting its stake in its listed entities to raise around ₹84000 crore by 2029-2030, as part of its targets under the second national asset monetisation pipeline (NMP 2.0).
The ministry of railways owns seven listed undertakings, and has plans to bring its stake down to 51 per cent in several of these entities in the pursuit of the monetisation target.
Experts said that if the government were to bring its stake down to the bare minimum for them to qualify as government companies, it would raise a little over ₹70,000 crore at current valuations.
Both moves are a part of a broader rationalisation exercise in the railways, an official said.
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