RVNL's Stock Declines 3% as Vande Bharat Train Joint Venture Derails

20 Jun 2023 , 12:44 PM

As per Money Control’s report, Rail Vikas Nigam Limited (RVNL) shares declined by almost 3 % in early trade on June 20 after the breakdown of its joint venture deal with Russia’s CJSC Transmashholding (TMH) to manufacture and maintain 120 Vande Bharat trains.

TMH did not agree to RVNL’s demand for a larger stake in the joint venture, resulting in the non-deposit of a required bank guarantee of approximately Rs 200 crore.

At the time of writing, RVNL’s stock was trading at Rs 121 apiece, experiencing a 2.77 % decline from the previous day’s closing price on the National Stock Exchange (NSE).

RVNL’s net profit in the fourth quarter witnessed a decline of 5 %, amounting to Rs 360 crore compared to Rs 378 crore in the corresponding quarter of the previous year. The company’s revenue operations also dropped by 11 % from Rs 6,437 crore to Rs 5,719 crore during the same period.

Established in 2003 as a wholly owned Public Sector Undertaking (PSU) under the Ministry of Railways, RVNL aimed to generate additional financial resources and execute railway infrastructure projects. Despite the recent setback, RVNL’s stock has experienced a remarkable surge of 87 % on the National Stock Exchange (NSE) in the last three months.

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