IRFC was informed by RVNL, Ircon, and IRCTC
as to why railway equities are currently
so highly valued in the stock market.
8/7/2024,
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Today’s stock market: The prices of shares of RVNL, Ircon International, and IRFC hit a new high during early trading on Monday.
Today’s stock market: Despite Monday’s decline in the Indian stock market, railway stocks have experienced significant buying since early morning transactions. The equities of Indian Railway firms, such as Ircon International, Rail Vikas Nigam Limited (RVNL), and Indian Railway Finance Corporation (IRFC), saw a notable boost in value at the Opening Bell. The share price of the Indian Railway Catering and Tourism Corporation, or IRCTC, also rose by around two per cent.
The share price of IRFC rose and climbed to a new height of ₹206, marking an intraday rise of almost 9 per cent, while the share price of RVNL reached a new peak, registering an intraday rise of over 12 per cent.
Ircon’s share price increased by over 7% on Monday as well, hitting a new all-time high of 334.50 per share on the NSE.
Despite Dalal Street’s sideways trend on Monday, stock market gurus claim that railway stocks are higher. This is mostly due to the declaration made by Railways Minister Ashwini Vaishnav of plans to construct 10,000 additional coaches in addition to 2500 new general passenger coaches. The announcement by Vaishnav that 50 new Amrit Bharat Trains, a fast and opulent train service, will be built, has also contributed to the rise in railway stocks.
This growing trend is also being accelerated by the Union Budget’s expectations of a special emphasis on the railway infrastructure.
Initiators of Railway Stock
“The rise in railway stocks can be directly attributed to the Minister for Railways’ announcement of 1,000 additional coaches and 2,500 new general passenger coaches,” said Sandeep Pandey, founder of Basav Capital, in his explanation of the spike in railway stocks.
Following his statement on Monday that 50 new Amrit Bharat Trains will be manufactured, significant buying took place, driving up railway stocks.
The former deputy vice president of HDFC Bank claims that Indian railway companies have been trying to raise their capital expenditures.
This is likely to maintain the upward trend in their business volumes. Because of this, despite the current high valuations in the Indian stock market, bulls are placing large bets on railway stocks.
According to Profitmart Securities’ Head of Research, Avinash Gorakshkar, “the railway minister announced the introduction of 3,000 new trains in the next five years” in November 2023.
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