Rail stocks plunge post Prabhu's maiden budget

Last Updated: Thu, Feb 26, 2015 16:11 hrs

Railway Minister Suresh Prabhu's maiden budget failed to cheer up a majority of rail stocks.

Most stocks associated with the railways plunged in trade on Thursday, after Prabhu presented his budget in the Lok Sabha.

Stocks of companies like Texmaco Rail and Engineering, Container Corporation of India, Kalindee Rail Nirman (Engineers), Stone India, and Cimmco took a hit.

However, the stocks of Hind Rectifiers and Transformers and Rectifiers (India) made gains on the day.

At the Bombay Stock Exchange (BSE), shares of wagon-maker Texmaco Rail and Engineering ended 3.5% down at 135.70.

The scrip of Container Corporation of India fell 3.47% to end at 1518.95.

Stocks of Kalindee Rail Nirman (Engineers) decreased 4.05% to close at 135.10.

The scrip of another company associated with the railways, Stone India, also took a hit to close at 79.70, down 6.07%.

Stocks of wagon manufacturer Titagarh Wagons though rebounded after declining by over 4% to end 0.5% at 582.1.

Shares of Cimmco ended down 6.93% at Rs 71.2.

The shares of Hind Rectifiers though shot up 14.7% to 89.30.

The scrip of Transformers and Rectifiers (India) at the BSE also had a happy outing closing at 193.90, up 3.97%.

Kernex Microsystems, another scrip associated with the Railways, ended flat at 46.55.

Investor sentiments were subdued after Prabhu outlined various proposals to bring the public transporter's finances in order and usher in investments for sustained development.

Various proposals related to increase in investments, erecting new rail infrastructure, rationing of energy consumption and sprucing of passenger amenities were announced by the minister.

Indian Railways, one of the largest railroad networks in the world, is suffering from lack of investments and upgradation of infrastructure to cater to the ever-growing demand of passenger and freight movement.

The minister sought to correct the investment deficit position of the railways by proposing new initiatives for generating financial resources like tying-up with pension funds and other debt-related instruments.

The markets expected the budget to bring-in fiscal stability to the railways and fund inflows for modernisation, in line with the government's proposal for infrastructure development through the public-private partnership (PPP) model.

More from Sify: