Mumbai: Texmaco Rail & Engineering, formed after demerger of Texmaco Ltd, expects to get regulator approval to list on the stock exchanges soon, a senior official said on Wednesday, sending the firm’s shares soaring.
“An application is pending with Sebi (Securities and Exchange Board of India) and we expect the approval to come any day now as it has been with Sebi for quite some time,” A.K. Vijay, chief financial officer, Texmaco told Reuters.
“Given a chance, we would list it today”.
Texmaco shares dramatically rebounded from being almost 9% down to be up 8% after his comments.
After market hours on Tuesday, Texmaco had reported an 83% plunge in Oct-Dec net profit to Rs39.25 million on lower sales.
Vijay attributed the decline in net profit to demerger as “the turnover and profitability are divided into two companies.”
Texmaco had spun off its heavy engineering and steel foundry divisions into Texmaco Rail and Engineering. Texmaco now manages real estate, infrastructure and hydro-electric power generation projects.
The demerger was to unlock the shareholder value in the company’s real estate business, which is now “well on the horizon,” Texmaco said in a statement.
Texmaco has submitted a proposal to develop mill land in the capital to the Delhi government and the proposal is expected to be cleared soon, it said.
The firm is expected to continue to get robust orders for wagons from the Indian Railway but orders from the private sector would remain sluggish, two analysts said.
Texmaco Rail in December had signed a joint venture with Australia’s UGL to set up a railway equipment facility in Kolkata.
The Indian Railway has an outlay of about $9 billion to boost rail infrastructure in Asia’s third largest economy.
The rail budget for 2011-12 is scheduled to be presented in Parliament later this month.
At 12:27 pm, Texmaco shares were up 5.54% at Rs40 in a choppy Mumbai stock market.