Titagarh Rail Plans Rs 700 Crore Fundraise Through QIP

The wagon manufacturer said proceeds from the QIP will be used to fund future growth initiatives.

<div class="paragraphs"><p> (Source: Company website)</p></div>
(Source: Company website)

Titagarh Rail Systems Ltd. will raise up to Rs 700 crore through qualified institutional placement, following board approval.

The fundraising will be done in one or more tranches, subject to regulatory and statutory approvals, the company said in an exchange filing on Wednesday. It will also seek shareholders' nods through an extraordinary general meeting.

The wagon manufacturer said proceeds from the QIP will be used to strengthen the company's position in its core businesses and to fund future growth initiatives.

Titagarh Rail Systems Expects To Steam Ahead With Steady Cash Flows

The board also constituted a committee to scout a partner for the shipbuilding, bridges and defence business. The committee will also seek assistance from external advisors or merchant bankers for this purpose.

Currently, wagons and rail passenger coaches are the company's core operations.

There will be no capital allocation for the shipbuilding business for the next couple of years, but the company will be executing old orders, the company's Vice Chairman and Managing Director, Umesh Chowdhary, told BQ Prime last month.

“The shipbuilding business will be a booster for growth once the passenger rail and freight rail systems are fully stabilised,” he said.

Titagarh Rail reported a 56.9% rise in net profit in the second quarter, while its revenue was up 54%. The company is seeing strong demand for wagons from the private sector, having finalised orders worth Rs 12 billion in the past few months and having an order backlog from the private market (26 freight rail systems order book).

The Kolkata-headquartered company recently received certification for the export of passenger rail systems and plans to grow its international business.

Shares of Titagarh Rail Systems closed 1.59% higher at Rs 796.9 apiece ahead of the announcement on Wednesday, as compared with a 0.05% rise in the benchmark BSE Sensex.

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