RVNL surges 10% as JV emerges lowest bidder for project worth Rs 2,249 cr

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Shares of Rail Vikas Nigam Limited (RVNL) hit a new high of Rs 118.40, as they rallied 10 per cent on the BSE in Tuesday’s intra-day trade after RVNL-SCC joint venture (JV) emerged as the lowest bidder (L1) for project cost of Rs 2,249 crore from the Additional Chief Engineer, Water Resources Zone, UHLC, Udipar.

The nature of contract is planning, design and construction of main Canal and Structures including associated distribution system to provide Irrigation facility to 41903 ha. area through Piped Irrigation network for upper high-level canal of Mahi Bajaj Sagar Project, Banswara (Rajasthan) on Engineering, Procurement and Construction (E.P.C.) single responsibility turnkey basis, including 10 years O&M. The order should be executed in 42 months.

Meanwhile, the Department of Public Enterprises on Monday granted the status of Navratna to the Rail Vikas Nigam Limited (RVNL), the company said in an exchange filing. In India, Navratna companies are those state-controlled firms that can receive investments up to a value of Rs 1,000 crore.

In past one month, the stock has zoomed 73 per cent, as compared to 4 per cent rise in the S&P BSE Sensex.

RVNL mostly works on a turnkey basis and undertakes the full cycle of project development from conceptualisation to commissioning including stages of design, preparation of estimates, calling and award of contracts, project and contract management, etc.

RVNL follows an asset-light business model, which helps keep its fixed asset part lower, helping it to keep its balance sheet stress free, and resulting in lower inventory days. RVNL is a project-executing agency working for and on behalf of the Ministry of Railways (MoR) and has a strong order book visibility, which is likely to play a key role in the development of railway infrastructure in India.

The management expects revenue to grow at a CAGR of over 20 per cent in the coming few years on the back of strong order books and new order inflows.

Last month, a joint venture of Russian firm Transmashholding (TMH) and RVNL emerged as the lowest bidder for the manufacture and maintenance of 200 lightweight Vande Bharat trains. The consortium made a bid of around Rs 58,000 crore, with the cost to manufacture one train set at Rs 120 crore.

Earlier, this month, RVNL in consortium with Siemens India, emerged as the lowest bidder (L1) for Mumbai Metro line 2B of Mumbai Metropolitan Region Development Authority (MMRDA). The project is estimated to cost around Rs 378.16 crore.