GE firms pick up 15% stake in Titagarh Wagons

GE Equipment Services and GE Commerce Finance, part of General Electric Company, have picked up 15 per cent stake in Kolkata-based wagon manufacturer, Titagarh Wagons.

The deal marks GE Equipment Services' entry into India, where it intends to serve all aspects of infrastructure for the movement of raw materials and finished goods with financing, operating and monitoring services.

Equipment Services is the owner and lessor of more than two lakh rail wagons and intermodal assets in North America and Europe.

As a result of the alliance, Equipment Services will get preferred access to Titagarh-manufactured wagons, which it will lease out to the Indian Railways and private shippers here.

Umesh Chowdhury, managing director, Titagarh Wagons, said, the strategic co-operation would extend beyond the Indian shores. "GE is a large buyer of wagons and the relationship will help us make further inroads in overseas markets." He, however, refused to disclose the valuation of the deal.

Titagarh Wagons has clocked a turnover of Rs 320 crore for the year ended March 2007. The company has lined up modernisation plans. It plans to develop asset intelligence solutions for wagons. Chowdhury said, "We want to participate in public private partnership initiatives of the Indian Railways."

The capital expenditure over the next year is likely to be in the region of Rs 150 crore.

Titagarh Wagons plans an an initial public offering (IPO) soon. Its promoters currently hold 60 per cent stake, GE 15 per cent and the balance held by some private equity players.

Chowdhury said, GE's participation was through a mix of primary and secondary sale of shares and GE would get an observer seat on the company's board.

With its first equity investment, GE's transport solutions is endeavouring to take its first step to serve India's infrastructure needs.

Chowdhury said the company would look at inorganic growth outside India as well.