Titagarh Rail Approves ₹200 Crore Fundraise via Preferential Warrants to Promoters

10 Jul 2025 , 10:35 AM

Shares of Titagarh Rail Systems Ltd. were in focus on Thursday, July 10, after the company’s board approved a fundraising proposal of up to ₹200 crore via preferential allotment of convertible warrants.

The board cleared the issue of 21.16 lakh warrants, each fully convertible into one equity share with a face value of ₹2. The conversion price has been set at ₹945 per share, close to the stock’s closing price on Wednesday.

The warrants are being allotted to promoter group entities. Among them is Rashmi Chowdhary, who already held a 7.52% stake in the company at the end of the June 2025 quarter. Once the warrants are converted, her stake is expected to rise to 8.56%. Another recipient, Prithish Chowdhary, who did not hold any shares as of June-end, will own 0.39% post-conversion.

As per the terms, the warrants can be converted in one or more tranches within 18 months from the date of allotment. Investors will need to pay 25% of the total value upfront, with the remaining amount payable at the time of conversion.

The proposed issuance is subject to shareholder and regulatory approvals. The company has called an extraordinary general meeting (EGM) on August 8, 2025, to seek shareholder consent for the preferential issue.

On the operational front, Titagarh Rail is stepping up its role in India’s railway modernization drive, with large-scale manufacturing activity underway at its Uttarpara facility near Kolkata.

The company is involved in assembling lightweight metro coaches and is preparing for the sleeper version of the Vande Bharat Express, further cementing its role in India’s premium train ecosystem.

Among its recent projects is the Pune Metro, which features India’s only aluminium-bodied metro coach. Compared to stainless steel, aluminium coaches are lighter and more energy-efficient, though they come with higher manufacturing costs, said Prithish Choudhary, Deputy MD of Titagarh Rail.

Despite a subdued fourth quarter, the company remains upbeat about its growth prospects in FY26. It expects strong performance from both its freight and passenger rail segments. Vice Chairman and MD Umesh Chowdhary said the company is targeting sustainable margins of 11–12% in FY26, supported by a sharp ramp-up in execution across its order book.

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