Railway stocks derail: IRFC, RVNL, Railtel and IRCON decline over 3 per cent amid global downtrend

Indian Railway stocks, including Indian Railway Finance Corporation Ltd (IRFC), Ircon International Ltd, Indian Railway Catering And Tourism Corporation Ltd (IRCTC), and Jupiter Wagons Ltd, opened significantly lower on August 5, continuing the red streak.

On August 5, the Indian equity benchmark indices, BSE Sensex and Nifty50, tumbled in early trading, influenced by global market trends. The BSE Sensex fell below the 80,000 mark, while Nifty50 hovered near 24,300. By 9:45 AM, the BSE Sensex had dropped to 79,524.75, down 1,457 points or 1.80 per cent. Meanwhile, Nifty50 stood at 24,272.10, a decrease of 446 points or 1.80 per cent.

Notably, IRFC shares have surged over 530 per cent since last year, RVNL has soared 390 per cent, Railtel has climbed 270 per cent, and IRCON and Jupiter Wagons both rose more than 260 per cent.

Despite their recent success and strong order books providing revenue visibility, the stocks experienced a downturn today. RVNL, which had an order book of ₹80,000 crore, and Titagarh Rail Systems, with ₹28,076 crore as of March 2024, also saw declines.

How did the railways' share price open?

As per BSE, here are the key drops seen on August 5 at 9:45 am.

Rail Vikas Nigam: Down 4.68 per cent to ₹562.40

IRFC: Down 4.06 per cent to ₹184.50

IRCON: Down 3.08 per cent to ₹277.30

IRCTC: Down 1.87 per cent to ₹948.30

Railtel: Down 4.27 per cent to ₹480.45

Jupiter Wagons: Down 3.38 per cent to ₹590.50

Titagarh Rail Systems: Down 4.68 per cent to ₹1428.30

What triggered the first decline?

Multibagger railway stocks witnessed a sharp decline following the Union Budget 2024-2025, which offered minimal emphasis on the railway sector. Investors had anticipated substantial funding and development plans for railways, but Finance Minister Nirmala Sitharaman's budget speech largely overlooked the sector. This lack of focus resulted in significant drops in stock values across the board, as reported by Mint.

In the past decade, the Indian government has embarked on an extensive modernisation campaign to upgrade the railway system. This effort encompasses a significant expansion of metro networks in various cities and the launch of ‘Vande Bharat’ trains, which started operation in 2019.