Fresh Railways orders breathe life into wagon firms

The latest round of orders given out by Railways for its earlier wagon tender has benefited companies like Amtek Railcar, CEBBCO and Texmaco, which would now help these entities partly revive their businesses.

Most of these companies are dependent on Railway orders to a large extent and had suffered due to lack to orders.

Texmaco, belonging to the Saroj Poddar Group, has got mandate for 1621 wagons while Jabalpur, MP based listed entity CEEBO bagged orders for 500 wagons.

Amtek Railcar Industries, part of the troubled Amtek Auto group, could manage an order for only 100 units.

As part of its tender for 21,758 wagons under the maiden reverse auction process, Titagarh Wagon had earlier bagged the largest order for 5,058 wagons followed by Jupiter Wagons (2,894), Modern Industries (2,643) among others, DNA Money had reported.

The smallest order has gone to Amtek Railcar, fully owned by Amtek Transportation Systems.

Amtek Railcar was formed in 2008 as a joint venture between Amtek group and American Railcar, which later exited the company in 2014 by selling its 50% stake after the joint venture project suffered delays.

CEEBCO, or Commercial Engineers and Body Builders Co, a listed entity, which got orders for 500 wagons, has been going through some rough times and had even stopped looking at businesses in wagon making due to its own financial woes as the process of manufacturing the wagons require financial commitment like buying steel from steel makers and spares and components from suppliers.

It, instead focused on the refurbishment of old wagons and supply of assemblies for Indian Railways.

But then the company started pursuing renewal of its registration with Research Design and Standards Organisation, a wing of Railways, for permission to manufacture wagons and it has now paid off for the company.

CEEBCO is an example of how the low level of investments by the Railways impacted the private sector.

"The company had incurred significant borrowings for setting up of railway wagon manufacturing facility. Since, the railway wagon business did not materialise, the existing business had to service the borrowings. The ballooning interest cost burden and downturn in automotive demand in the past, has resulted in significant fund constraints resulting in loss of customer orders and additional cost of procurement," CEEBCO said in its fiscal 2018 annual report.

METAL METTLE

• Texmaco has got mandate for 1621 wagons while Jabalpur, MP based listed entity CEEBO bagged orders for 500 wagons
   
• Most of these companies are depended upon Railway orders to a large extent and had suffered due to lack to orders