Land Acquisition In West Bengal To Boost Testing Of Vande Bharat Trains: Titagarh Rail Systems CEO
The newly acquired land, adjacent to Titagarh’s existing 35-acre facility in Uttarpara, will expand the total operational area to around 75 acres.
Titagarh Rail Systems, a leading producer of railway wagons and passenger trains, has signed a 99-year lease agreement with the West Bengal government for a 40-acre land parcel in Uttarpara, West Bengal. The lease agreement has been secured at Rs 126.63 crore.
The expansion will help the company test trains such as the Vande Bharat, according to its CEO, Umesh Chowdhary.
“In order to test the trains, particularly the Vande Bharat, we need a long test track and adequate testing facilities. Now we have a complete end-to-end facility for manufacturing the passenger coaches, from production to testing and to dispatch them directly from our factory,” he said during a conversation with NDTV Profit on Wednesday.
Chowdhary noted that the alternative was to transport partially built trains elsewhere for testing, an option that was neither commercially nor technically viable.
ALSO READ
Mumbai Lakes Likely To Hit Full Capacity In Shortest Period In 10 Years As Water Levels Rise To 80%
The newly acquired land, adjacent to Titagarh’s existing 35-acre facility in Uttarpara, will expand the total operational area to around 75 acres. The company has already begun groundwork, clearing debris and preparing the site for development.
The expanded facility is expected to be operational within the next nine to 12 months.
“The first step is to have about a capacity for about 800-850 coaches within a couple of years. The total capacity we are targeting at our Uttarpara facility, which is the existing plus the expanded facility, will ultimately go to about 1,200 cars a year, with each metro car selling at about Rs 10-12 crore. This will happen over the next four or five years,” the top executive highlighted.
In addition to the land acquisition, Titagarh Rail Systems is raising Rs 200 crore through a promoter group issue of warrants to fund investments in state-of-the-art plant and machinery and to support working capital needs. This move will increase the promoter stake by approximately 1%, reinforcing confidence in the company’s growth plans.
“Rs 200 crore in the overall scheme of things is not a very significant amount. This was more to enhance the promoter stake, but also to make available this fund in the company as a sign of confidence to the employees, to everybody,” the CEO said.
Shares of Titagarh Rail Systems were trading 1.27% higher at Rs 954.1 apiece on the NSE at 12:17 p.m., compared to the benchmark Nifty50 remaining flat at 25,187.45, down 0.03%.
