Texmaco Rail and Engineering buys Jindal Rail Infra for Rs 615 crore

Mega deal makes Texmaco biggest rolling stock maker in India

In a major deal in the railway sector, Kolkata-based rail wagon manufacturer Texmaco Rail and Engineering on Thursday acquired a 100 per cent stake in Jindal Rail Infrastructure, another rolling stock manufacturer, for Rs 615 crore.

The acquisition is the largest in the history of India’s rolling stock industry, and will significantly ramp up Texmaco’s manufacturing capacity, making it the largest producer of wagons in India, the company said in a statement.

"This acquisition arrives at an opportune moment, given the surge in growth in India’s wagons industry, supplemented by the government’s policy for dedicated freight corridors,” the company said in a statement.

 

According to a disclosure made to exchanges on Thursday, the company will pay Rs 465 crore and Rs 150 crore to the two stakeholders of the company, JITF Urban Infrastructure Service Limited and Siddeshwari Tradex Private Limited, respectively. The deal is expected to be completed in 57 days or an extended period as may be agreed between the parties. In 2023-24, Jindal Rail's turnover was Rs 748 crore.

Founded in 2007, the company is headed by Prithvi Raj Jindal, one of the four Jindal brothers. The company has traditionally built a variety of commodity-specific, special-purpose wagons, components for coaches and locomotives, and has delivered over 8,600 wagons since its establishment. The company has a 123-acre facility in Vadodara, Gujarat, which manufactured 1,650 wagons in 2023-24.

The acquisition will aim towards leadership in special purpose private freight rolling stock both domestic and international; open opportunities for new product lines, including other rolling stocks; and contribute to the company’s presence in Western India along with unique opportunities for enhanced exports, Texmaco told exchanges.

The company was among the largest bidders of the mega-wagon tender floated by the Ministry of Railways in 2022 for close to 90,000 wagons. Texmaco won the contract to supply 20,000 of these wagons. The latest acquisition will allow it to capture more of the rolling stock industry, with Indian Railways planning a massive upgrade of its existing, ageing fleet.

In 2022-23, the industry told railways to continue wagon acquisitions on a rolling basis, so that capacity expansion plans could be planned in the continuum. Last December, the company won another order for the supply of 3,400 wagons.

“A merging of the capabilities of Texmaco and Jindal Rail will create a significant synergistic effect, letting Texmaco foray into new types of wagons, scale up production with minimal capex, amplify export capacity and effectively bolster competitive advantage. An excess of 60 acres of available land bank in Vadodara will power quick capacity expansion in allied businesses such as passenger mobility, while Texmaco’s expertise will allow vertical integration of operations,” the company said.

The company said the acquisition is a step to spread its footprint across India and eventually gather pace to become a global name in railways. Saroj Kumar Poddar, Chairman of Texmaco, said the acquisition would allow the company to expand its global footprint along with its domestic operations.

Texmaco recently acquired a majority stake in Saira Asia, a global railway interior company. Another joint venture with Czech freight maker Nymwag is also powering ambitious expansion plans, with a new factory to open in Sodepur soon, it said.