Government may bring merger proposal!

The Railway Ministry holds majority stake in both Rail Vikas Nigam (72.8 percent), IRCON International (65.17 percent), and the combined market capitalization of the two companies is about ₹65,000 crore. Following reports earlier this month that a merger was on the table, both companies had informed the stock exchanges that they had not been informed about any such proposal so far by the government.

However, the official, on condition of anonymity, said that the Railways can go ahead with the plan and in view of this, it has decided to postpone the selection of a new Chairman and Managing Director for IRCON.

Earlier, the ministry had reportedly asked the Public Enterprises Selection Board to postpone the selection process for the post due to the impending merger. Both companies operate in the railway infrastructure sector.

Parallelly, the government also plans to sell its stake in its listed entities to raise about ₹84000 crore by 2029-2030, as part of its target under the second National Asset Monetization Pipeline (NMP 2.0).

The Railway Ministry owns seven listed undertakings, and plans to bring its stake in many of these entities to 51 per cent to achieve the monetization target.

Experts said if the government were to bring down its stake to the minimum level to qualify as government companies, it would have to raise a little more than ₹70,000 crore at the current valuation.

Both the steps are part of a wider rationalization exercise in the Railways, an official said.